Does adaptation finance invest in disaster risk reduction?

Working and discussion papers
August 2015
When dealing with natural disasters, the focus of international aid is on responding, rather than reducing potential impacts before it occurs.

There is a gap for disaster risk reduction (DRR) financing, which could be filled by adaptation funds that have the capacity to invest directly in DRR activities and to integrate DRR into their other activities. 

Between 2002 and 2014, approximately 13% of total multilateral adaptation finance had a primary focus on DRR activities (US$ 405 million). This makes DRR the second most funded activity after agriculture. In addition, DRR activities are often integrated into other projects.  

This analysis suggests that water and coastal protection are the sectors where DRR is most integrated.  DRR investments through adaptation funds appear to be more focused on the poorest countries in comparison to DRR finance from international aid. 

This was particularly the case for Small Island Developing States (SIDS). DRR channelled through adaptation funds also appears to prioritise activities related to the understanding of risks with a preventive aim, while DRR channelled through international aid prioritises effective responses after a disaster has occurred. 

While there is a strong emphasis on the integration of DRR measures in national plans, further work is needed to realise this objective in practice.
Overall, adaptation finance is already playing an important role in supporting DRR. Programmes supported by the Green Climate Fund (GCF) also have the potential to support DRR activities as part of efforts to support a paradigm shift towards low-emission and climate-resilient development.