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Global Assessment Report on Disaster Risk Reduction 2013
From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction |
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Global Assessment Report on Disaster Risk Reduction 2013
From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction |
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218 Part III - Chapter 14
budgets include studies on the economic costs and benefits of DRR. Just under 80 percent of countries report that they assess what impact new development investments may have on disaster risk; however, how these assessments are translated into policy and practice is rarely made explicit.
14.3
Increased investment
in disaster risk management
Countries do not know how much they currently invest in disaster risk management. Complexities in budgeting and accounting across sectors add to the challenge of tracking current investments, but several governments have begun to tackle this problem as well as significantly increasing investments, particularly in corrective disaster risk management.
If countries are to realistically assess the trade-offs between disaster risk reduction and policies that promote rapid economic growth, one particular challenge is that few countries are able to quantify their investments in disaster risk reduction and hence estimate the resulting costs and benefits.
In the 2011–2013 HFA progress reviews, 90 percent of countries report that they consider disaster risk in relation to national and sector public investment. However, just 52 percent report having systems in place that allow them to do so. Further, only 36 percent reported dedicated funding to risk reduction and prevention versus response and preparedness.
However, a number of countries in both Asia (India, Indonesia, Philippines) and Latin America (Costa Rica, Guatemala, Mexico, Panama and Peru) have been involved in dedicated efforts to track and estimate their investments in disaster risk reduction.
Capturing overall annual expenditure in dedicated disaster contingency or reserve funds is relatively straightforward. However, in a fiscal environment where disaster risk reduction investments, particu-
larly in prospective risk management, are rarely classified in national budgets, and officials with fiduciary responsibilities have little familiarity with disaster risk management, the accurate portrayal of budgetary allocation and realised expenditure is particularly challenging. This is compounded when analysis is extended to local public investment.
Although identification of expenditure managed by a national disaster risk management agency may be possible, identifying expenditure by other spending units in a government, for example across sectors, is complicated, as expenditure is seldom coded as disaster risk reduction (Box 14.6). For example, a project to strengthen water management may reduce drought and flood hazard, but would probably not be coded as disaster reduction expenditure. This ‘embedded’ expenditure on disaster risk reduction may be particularly hard to identify. Even more challenging is identifying whether public investment in general, to build schools, roads and health centres, for example, has integrated disaster risk reduction considerations.
To track embedded expenditure, close coordination between the investment planning and the financial arms of national or even local government is critical. Investment plans that take disaster risk into account may not actually be translated into budget plans (
 Orihuela, 2012 Orihuela, J.C. 2012.,Understanding Existing Methodologies for Allocating and Tracking DRR Resources in 6 Countries in the Americas: Colombia, Costa Rica, Guatemala, Mexico, Panama and Peru., Study commissioned by UNISDR., Geneva,Switzerland: UNISDR.. Click here to view this GAR paper. As Box 14.6 shows, countries have taken different approaches to identifying this investment.
Investment tracking can allow better identification of costs and benefits of disaster risk reduction, but as the above examples highlight, requires significant efforts and resources. From this perspective, another approach may be to embed disaster risk reduction into national asset management. The asset management approach has been adopted in some
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