13 Replies Latest reply: May 24, 2017 4:58 PM by 1309977 RSS

    E-Discussion #1: Disaster Risk Management And Climate Resilience: Opportunities and Challenges for Applying RBF Approaches

    1309977 C4D Extraordinaire

      Welcome to the RBF/OBA Community of Practice’s e-discussion on disaster risk management (DRM) and climate resilience! Over the course of the next three days, we will explore the opportunities to apply RBF approaches in DRM and climate resilience and discuss potential challenges associated with these approaches. We hope to have a lively, stimulating discussion and welcome your questions and comments. 

      Hannah Michael Hughes and Julian Sosa Valles will be facilitating this e-discussion, making sure your questions and comments are seen by our topic specialists. Our e-discussants are Charis Lypiridis, an Infrastructure Specialist, and Tatiana Skalon, a Disaster Risk Management and Financing Analyst.

       

      Discussion board guidelines:

       

      • Please be respectful of our e-discussants and other e-discussion participants.
      • Please be patient as we compile responses to your comments and questions, we will do our best to respond in a timely fashion.
      • There are no "bad" questions, so ask away!

        

      Background materials:

       

        

        • Re: E-Discussion #1: Disaster Risk Management And Climate Resilience: Opportunities and Challenges for Applying RBF Approaches
          1195080 C4D Connoisseur

           

          Welcome to our E-Discussion on Results-based Financing and Disaster Risk Management. My name is Charis Lypiridis, and I am an Infrastructure Specialist with the Global Partnership on Output-Based Aid (GPOBA) at the World Bank Group. For the next two days, Tatiana and I will be discussing with all of you the use of Results-Based Financing (RBF) in disaster risk management (DRM) and climate resilience.

           

          We would like to explore the operational linkages between RBF and DRM, identify the benefits and challenges of applying RBF instruments in DRM operations and discuss opportunities for operational and knowledge-sharing partnerships

           

          Since this is the first time of such a discussion in our community, we prepared draft working paper and deck of slides on the applicability of RBF and OBA in Disaster Risk Management as reference that could inform and stimulate discussion.  The paper, which is still in draft format, was prepared with the support of Tatiana Skalon, a consultant on DRM operations who will join us in this discussion.

           

          With this first discussion we are aiming at an opportunity to share knowledge and best practices of applying RBF approaches in the DRM sector.

           

          On behalf of my all my colleagues at GPOBA, thank you very much for joining the discussion and we are looking forward to your active participation!

           

            • Re: E-Discussion #1: Disaster Risk Management And Climate Resilience: Opportunities and Challenges for Applying RBF Approaches
              1412120 C4D Enthusiast

              Thank you for your introduction Charis and - from my side - welcome everyone to this E-Discussion! Do let us know especially about:

               

              • Any subsidy program in disaster risk management you are aware of and its success and lesson learned;
              • Your idea about if there is a request for a subsidy program that disburses by results in your region;
              • Thoughts on which pillars of disaster risk management can OBA best contribute to;
              • Your understanding of how can OBA approach help achieving the results in disaster risk management.

               

              Thanks for joining and looking forward for your comments and thoughts!

                • Re: E-Discussion #1: Disaster Risk Management And Climate Resilience: Opportunities and Challenges for Applying RBF Approaches
                  125017 C4D Explorer

                  Hi Tatiana, thanks for thought-provoking points. I think that by assessing the possible use of OBA instrument in climate resilience, the draft Working Paper seeks to explore avenues in assisting client countries in climate resilient development. So I believe OBA could best contribute to risk reduction through strengthened preparedness. An example of it is a possible OBA support through a targeted and sustainable approach to retrofitting houses for smaller projects in remote areas, which is referenced in the Working Paper.

                   

                  The draft Working Paper builds upon the various experiences and knowledge resources across the World Bank related to climate change and urban development by introducing analysis on the applicability of RBF mechanisms in various sector. I think an important objective of the Paper is to capture the existing knowledge and facilitate in sharing it among various stakeholders; this is likely to guarantee that the results of the review are directly used for the benefit of the future projects and is endorsed by the maximum number of stakeholders.

                   

                    • Re: E-Discussion #1: Disaster Risk Management And Climate Resilience: Opportunities and Challenges for Applying RBF Approaches
                      1412120 C4D Enthusiast

                      Hi Zaruhi. Thank you for sharing your thoughts! Indeed, risk reduction is often targeted with - in general - subsidies. For instance, we saw examples of subsidies used for seismic retrofitting of private houses and schools (like in Japan). In the World Bank's experience, there has been also some post-disaster subsidy programs in Pakistan and Colombia. In the note we summarised some of these experiences, including such large-scale programs as the ones in Pakistan and Colombia.

                       

                      Yet, Output-Based Aid works on a smaller scale and albeit some important benefits have not been used in disaster risk risk management. Therefore, it is worth brainstorming how (or if) OBA can benefit this sector - considering that OBA offers a targeted support (specifically, it helps delivering aid to poor and marginalised people), disburses funds based on specific outputs and through subsidies. We have included some hypothetical examples in the note and I am also looking forward to see other specific suggestions.

                • Re: E-Discussion #1: Disaster Risk Management And Climate Resilience: Opportunities and Challenges for Applying RBF Approaches
                  1103816 C4D Explorer

                  Thanks for this conversation, and for preparing the useful working paper on the matter. Two quick reactions.

                   

                  First, one important question is how to include disaster risk in RBF operations that are not specifically about risk management. How to make sure the water or electricity connections supported by RBF are well designed so that they do not create new vulnerability to natural hazards and climate risks? I guess the Independent Verification Agent could also review the resilience aspects of the outputs, and risk could be part of the definition of the "result". What is most important to build the resilience of populations to natural risk and climate change is to provide them with basic services (housing, water, energy, etc.) in a way that is risk-informed and resilient. Some of the most vulnerable people are vulnerable because they lack improved water or live in low-quality housing. If RBF could contribute to providing these individuals to *resilient* services and housing, it would contribute a lot to building resilient. One objective could be to ensure that all RBF interventions take risks in their design so that they do not create new vulnerability and contribute to resilience.

                   

                  A second issue is how RBF could contribute to projects directly targeted to risk management, like housing retrofit or flood protections. I think PforR have a key role to play for policies, as illustrated by the operation in Morocco. But OBA could also play a big role, especially in low-income areas. A series of opportunities may arise with the new possibility to do Cat-DDO in IDA countries. Cat-DDO are contingent credit lines: countries can access liquidities if they declare a state of emergency, so that they can finance the management of the crisis. But Cat-DDO needs to include a risk management prevention plan. If Cat-DDO are successful in IDA countries, we can expect the design of such plans in many countries, and much more action to reduce risk in low-income countries. When we get to the implementation of these plans, OBA could offer a way forward in very poor environment...

                    • Re: E-Discussion #1: Disaster Risk Management And Climate Resilience: Opportunities and Challenges for Applying RBF Approaches
                      1412120 C4D Enthusiast

                      Hi Stephane, I totally agree that including disaster risk to RBF and also other Bank operations is important. Because we are responsible for what we finance. Yet, I believe, it is easier to include disaster risk considerations to RBF projects and make sure they have been actually considered than in any other type of financing. Disbursing by results is of a great value - and, as you said, independent verification plays an important role by helping to enforce the standards, such as disaster risks considerations. The point is, I believe, to make these considerations mandatory from the very beginning to ensure that what we finance is not washed away by floods or destroyed by an earthquake.

                       

                      Good thing is that the Bank has already opened up to this agenda, introducing, for instance, Climate & Disaster Risk Screening Tool. Some other mandatory measures can also be included in all the relevant operations - thinking aloud, something like a disaster matrix that any TTL has to compile and submit and that would include all disaster risks and a checklist of necessary actions to take (maybe something similar exists already?).

                       

                      Good point about importance of PforR and I am looking forward to see results of the program in Morocco. In my view, PforR is also great because it allows ensuring certain standards are enforced in an entire program. Coming back to the thoughts before, among such standards there might be a consideration for disaster risks.

                       

                      Thank you for bringing up the idea about Cat-DDO and implementation of the disaster risk management plans - it is a very valuable input for our paper!

                    • Re: E-Discussion #1: Disaster Risk Management And Climate Resilience: Opportunities and Challenges for Applying RBF Approaches
                      khetanip C4D Explorer

                      I have a Product that would help reduce Global warming and advance climate change Programs. My product would replace Paint and wood used in the Development sector of Infrastructures.The product is also Water proof and Fire Resistance. Its Fire resistance element would help in avoiding large disasters caused by fire. The product would benefit the climate as it replaces wood usage leading to less cut down of trees. I am from a developing Country and it is hard to represent my idea. Please would some one advice me if my product would make a difference to Climate change and Disaster Management ?

                      • Re: E-Discussion #1: Disaster Risk Management And Climate Resilience: Opportunities and Challenges for Applying RBF Approaches
                        1186480 C4D Master

                        Thank you so much for this initiative. I believe there are quite a few opportunities in this area. Here are some thoughts after a quick read of the paper, which have mostly to do with recovery:

                        1. What is a subsidy? This is probably found in RBF and OBA literature somewhere, but I don't see it in the paper. To me, a subsidy is when public funds are used to induce a particular behavior that (ideally) produces a public benefit. Therefore, financing the replacement of a road after a flood is probably not a subsidy, but providing households with funds to raise the level of their houses would be. Central government funding local government DRM improvements might be a subsidy, but it might not be. The examples in the paper seem to mix up pure public funding and public subsidies sometimes.

                        2. Business continuity. I think business continuity -- which is a form of preparedness -- is a huge potential area for OBA--for local governments, SMEs, and larger businesses on which recovery depends. Therefore, if the financial sector or the retail sector is back up and running after a disaster, you avoid the (all-too-common) situation where government is buying and distributing construction materials for shelter just because the local building materials place isn't open.

                        3. Housing retrofitting and recovery. When government pays for people to repair or replace their housing, it is giving a subsidy in the sense mentioned above (housing is a private good, but risk reduction and recovery have public benefits), but sometimes it's a bad subsidy. The Philippine government distributed almost US$1 billion after Yolanda in unconditional housing subsidies. On the other hand, for a good example, look at the Rekompak program in Indonesia, which has used a type of OBA for housing recovery. The program can withhold a subsidy if the house is not built to specs, they detect any corruption, etc. See here http://hdl.handle.net/10986/17640 and talk to the Indonesia team. The opportunity for GPOBA may be to help governments design and set up these programs in such a way that risk reduction results. As for retrofitting, this seems to me to be more difficult since so much of the housing of poor people is located where it shouldn't be, but I'd have to think more about it. Related to this, you should look at preventive resettlement as an area to consider. See http://documents.worldbank.org/curated/en/674571468047054696/pdf/702830ESW0P1100ventive0resettlement.pdf. In both retrofitting and recovery, you have organizational challenges because many governments have no way to deliver these programs, especially retrofitting.

                        4. Lastly, just stylistically, I would reverse the sequence of the paper to start with the DRM discussion and some minimal definitions for OBA and RBF, followed by a more in-depth discussion of the aid concepts. Also add some graphics to illustrate the key concepts. I got a bit lost at the beginning!

                        Enough for now -- thanks again! Priscilla Phelps

                          • Re: E-Discussion #1: Disaster Risk Management And Climate Resilience: Opportunities and Challenges for Applying RBF Approaches
                            1412120 C4D Enthusiast

                            Hi Priscilla, many thanks for your comments and thoughts!


                            And well noted in regards to the definition of a subsidy - I think I will add a glossary to the paper with all the major terminology. I also share your idea about a subsidy as a mechanism to induce a particular behaviour to achieve some public benefit, but both can also be interpreted in various ways. For instance, if we think about post-disaster reconstruction (as you propose with replacing a road) - public benefit can be in providing back the services or, as another example, private housing in a sustainable way, such as reconstructing damaged or destroyed assets in a seismically resistant way. Yet, it is good that you noticed about the public funding vs. public subsidies in the paper - I will definitely look into it. 


                            Talking further about housing retrofitting and recovery and the role of subsidies, I agree that sometimes subsidies are misused or do not lead to expected results. In fact, potential negative consequences of subsidising something is well explored by many researchers and journalists as well. I do believe it is more due to a non-systemic design of such programs and unintended consequences that such approach is likely to produce (I like an example of the "cobra effect" to illustrate this). Further, one thing is important here - OBA combines subsidies with payments done in a performance-based modality. The latter often times helps mitigating risks that subsidies inherit. For instance, unconditional subsidies would not be possible within OBA scheme, while making an OBA project would entail a very profound in-advance-thinking. In this sense, I do agree with you strongly that GPOBA could provide great support in designing subsidy programs and also making them in a way that our goal of inducing a desired behaviour is actually achieved.

                             

                            Great input about importance of business continuity and preventive resettlement - will definitely explore these! Thank you again!

                          • Re: E-Discussion #1: Disaster Risk Management And Climate Resilience: Opportunities and Challenges for Applying RBF Approaches
                            1530265 C4D Master

                            Thank you all for participating on the e-discussion! Although we originally scheduled it for three days, we will like to continue the conversation for people that did not have a chance to collaborate, and for new members. Feel free to share with your colleagues.

                            • Re: E-Discussion #1: Disaster Risk Management And Climate Resilience: Opportunities and Challenges for Applying RBF Approaches
                              1309977 C4D Extraordinaire

                              Thank you everyone for such an interesting and engaging e-discussion!