Significant Resources are required to combat Climate change and to invest in Preventative Measures


Last week, UNDP launched Mission 1.5, a global campaign to bridge the gap between millions of people and their governments on ambitious climate action. In the online game, players take on the role of climate policymakers and make decisions to try to limit the effects of climate change.

This is a worthwhile endeavor, for it has never been more urgent to listen to the voices of people on the ground who suffer the brunt of a warming planet. It’s also an opportunity to get a sense of what tradeoffs they would make to secure their future. Governments would be wise to listen.

But this is not only a demand issue. Significant resources are required to combat climate change and to invest in preventative measures, particularly in the most vulnerable of locations.

The new norm

In Africa, for example, Malawi, Mozambique, and Zimbabwe are pursuing a “build-back-better approach” for roads, rails, and ports; restoration of agricultural livelihoods; and promotion of resilience to climate shocks, disasters, and extreme weather events following massive flooding from 2019’s back-to-back tropical cyclones Idai and Kenneth.

“This is becoming the new norm,” says Eyerusalem Fasika, the African Development Bank’s acting country manager in Lilongwe, Malawi, as the changing global climate makes natural disasters bigger and more frequent. The landlocked southern African nation of 18 million has created a Department of Disaster Management Affairs to coordinate and direct risk management programs. “Ten years ago, I never would have imagined this frequency and level of disasters,” she says. “Our thought processes have to change.”

Adapt and save

In June 2019, the IMF endorsed investment in resilience-building by disaster-prone nations, citing lower expected losses, improved economic performance, and better continuity of public services. It acknowledged, however, that many vulnerable countries are likely to find such investments unaffordable. According to the United Nations Environment Programme, the costs of adapting to climate change in developing economies may range from $56 billion to $300 billion by 2030, or two to three times the currently available funding.

And yet, according to IMF economists, investing in resilience may cut the costs of post-disaster intervention by at least half. It’s a case that international organizations are making to donor groups and nations.

Case in point

In March 2019, Tropical Cyclone Idai blasted Malawi, Mozambique, and Zimbabwe with days of high winds and heavy rains, killing more than 1,300 people. A month later, Tropical Cyclone Kenneth hit some of the same areas and compounded the devastation, bringing total damages from the two storms to $4 billion. It was the first instance on record of such sequential disasters in a single season and left almost 3 million people without housing, electricity, or running water. More than 800,000 hectares of crops were wiped out.

“Malawi is one of the least developed countries in the world and also one of the countries hardest hit by climate change,” says Pritha Mitra, the IMF’s mission chief for Malawi. “We are looking at adapting to climate change and whether it’s actually an opportunity to not only boost growth, but also reduce inequality. In sub-Saharan African countries, the people who are most affected by climate change are the poorer households, so climate change is exacerbating already-large inequalities.”

Farmers and remote households in places like Malawi depend on mobile-phone services for early warning of weather events, planning what crops to plant, and gaining access to financing, Mitra says. So strengthening telecommunications systems to withstand catastrophic storms is important for building resilience, she observes.

“These countries can’t necessarily do it all on their own,” Mitra says. “These are poor countries. As the disasters beome bigger and more frequent, and thus more costly for all the various donor countries and international organizations, perhaps it is going to be cheaper if we all help with building resilience up front.”

Bouncing back

That’s a major takeaway from a 2019 working paper by IMF economists Alessandro Cantelmo, Giovanni Melina, and Chris Papageorgiou. These researchers rank countries by probability of sustaining a natural disaster based on 20 years of data through 2017. They identify the 34 most disaster-prone nations and find that they are mostly small or low-income countries in the Pacific or the Caribbean, with the Marshall Islands, St. Vincent and the Grenadines, Tuvalu, Micronesia, and St. Lucia at the top of the list.

The study shows that natural disasters such as droughts, floods, and storms can often cause damages totaling 50 percent of a country’s GDP, with indications that frequency and size of catastrophes have risen over the past 20 years. The costs of Hurricane Ivan for Grenada in 2004 amounted to 148 percent of GDP and those of Hurricane Maria for Dominica in 2017 reached 260 percent, reflecting the relatively small size of the countries’ economies.

Small nations can’t just bounce back from calamities on that scale. On average, the economies of disaster-prone countries grow by 1 percent less each year than those of non-disaster-prone countries because major resources have to be diverted to recovery from such calamities, the researchers find. The study shows that climate change may triple that growth gap. As their economies stagnate and revenues decline, disaster-prone nations carry significantly higher public debt than non-disaster-prone countries.

The researchers have developed a complex economic model to compare the effects of investing in resilience with those of simply providing disaster relief. It shows that disaster-prone countries would benefit only modestly by self-financing the higher costs of adaptation. “International aid is crucial,” they write. If forthcoming, the economists find that such help in paying for resilient infrastructure can yield dramatic results.

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