Is forecast-based financing the future of aid in the face of climate change?

By Ephrat Livni

Traditionally, disaster victims have received assistance after trouble hits. If a region is flooded, say, people in the area may get aid to rebuild. But a new approach to humanitarian giving is flipping the script and offering help in advance of disaster, using in-depth weather forecasting and risk analysis to predict future victims.

Called forecast-based financing, the method has been developed by the Red Cross and Red Crescent Movement with partners since 2007. The Red Cross Red Crescent Climate Centre has taken the scientific lead (pdf), mapping out which predictive tools are needed, the weather thresholds that must be reached to trigger automatic assistance, and who will benefit from aid. The method was most recently used by the government of Bangladesh to help 25,000 people in the flood-prone Kurigram district.

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One concern about the new approach is that aid recipients will use the predictive assistance for something other than disaster relief. For example, Shah Kamal, secretary of Bangladesh’s disaster ministry, told Reuters the local forecast-based financing project can only succeed if recipients “invest it right.”

But the approach has already been tested in eight other climate-related emergencies and proven successful, according to Red Cross spokeswoman Maherin Ahmed. She notes that research shows that forecast-based funding makes more effective use of emergency aid. The organization believes that acting in advance of climate disaster, rather than waiting for the worst to happen, will save lives and livelihoods.