SEMINAR ON RESULTS MANAGEMENT FOR PUBLIC SECTOR
EXCELLENCE
DISASTER RISK MANAGEMENT
Session 10
Budgeting for Disaster Risks:
Protecting Development
Investments from Disaster Risks
Impacts of Disasters on
Public Budgets
Damage to infrastructure
 Loss of development gains
Disaster impacts
 Physical
 Social
 Economic
 Environmental
Diversion of expenditures
 Contingent liabilities
 Emergency response
 Social protection
 Rebuilding
 Public
 Private
Loss of revenues
 Disruptions to tax base
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The case for DRM investment
• Disaster events set back development gains.
• Unsustainable development increases
poverty and the risk of disaster.
• Disaster losses may be considerably reduced
by using DRM in development programs.
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Reducing risk
Opportunities to address risk:
1) Assessment of risks and DRM options
 Needs to take place early in process
 Otherwise timing is often the biggest reason for
trade-offs against DRM
2) Long-term interventions may be needed for to increase
the coping capacities of the poorest and most vulnerable
3) Improved technologies can help
4) Post-disaster situations may be opportunities
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5) Contingency planning will help align those
opportunities
National and local budgets
Estimating fiscal exposure
1) What is the expected loss?
• Based on
– Annualized loss
– Probable maximum loss
2) What are the contingent liabilities of the government?
• Relief support and social protection?
• Rebuilding of infrastructure?
• Rebuilding of housing?
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3) What are the flows of resources to the government?
• For example for local governments, how much
assistance can they expect from national
government
Project budgets
Estimating risk to project
1) What are the potential hazards facing the project?
2) What is the exposure of the project?
3) What impact would potential disasters have on
 project life cycle ?
 planned results ?
 rate of return ?
4) Does the project itself make any risks worse?
5) How can this set of risks be reduced?
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6) How should remaining risks be accounted for?
Sources of Financing for DRM
External
• Adaptation funds, such as Green Climate Fund
• Credit to accelerate investment
Internal
• Innovative budgeting
(e.g. Philippines Local Calamity Funds)
• Capture of DRM benefits
• Market-based financing mechanisms to
incentivize private sector investment
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Public vs Private
How can public expenditures be leveraged to encourage or
incentivize private sector investment in DRM?
1) Direct and indirect application of public expenditures
Public goods
Direct
(e.g. infrastructure, community facilities,
sovereign liquidity protection)
Indirect
Markets
Private goods
(e.g. housing, private
insurance protection)
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Separating CCA investments from
other DRM activities
• Experience differentiating between the expected impact of
CC-induced and other atmospheric and hydrologic hazards is
scarce.
• Little evidence of cost differences between reducing local
CC-induced and other climate hazard impacts.
• Little evidence of differences in benefits from reducing local
CC-induced and other climate hazards.
• Even with non-climate hazards, there are co-benefits with
CCA for many types of interventions, including policy
reform, capacity development and exposure and
vulnerability reduction.
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ADB experience on addressing DRM in project cycle
Project Cycle
Key Activities in
Project Cycle
Document
IDENTIFICATION
 Project Identification
 Establish Project Team
Project Concept
Paper
PPTA Fact
Finding
PPTA
Inception
DESIGN
In-depth Project Analysis
Mid-term Workshop
Detailed Project Costing,
Design, Evaluation
PPTA Final
 Final Tripartite Workshop
APPRAISAL
(final design)
IMPLEMENTATION
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Impact and Vulnerability
Assessments
 Preparatory Project Inception
Mission
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Management Review Meeting
Appraisal Mission
Staff Review Committee
Interdepartmental Review
Loan Negotiations
Board Consideration
Risk Screening Tool
DRM Assessment
Scoping
 Fact-find missions
Interdepartmental Review
 Preparatory Project Approval
PPTA Midterm
DRM Assessment
Steps
Draft Project
Design Report
Draft Final Report
DRM Assessment/
Strategy Development
Implementation
Arrangements
Monitoring & Evaluation
Arrangements
Emerging Issue Areas
for Discussion
• Are climate change and other forms of
natural hazard risk now an inherent part of
development?
• Should adaptation to climate change and
other adjustments to natural hazards be
isolated as a “cost” above and beyond the
“cost” of development?
• Can spending on CCA and other forms of
DRM be considered as discretionary in
development?
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Thank you