Risk Financing for Rural Climate Resilience

In 2014, the CEP conducted a study to assess how risk financing could help strengthen the climate resilience of rural households.  Such financing mechanisms have been set up in other parts of the world, but little was known about their potential in the GMS until this study.

The study assessed the frequency and severity of climate-related disasters, the impact of these events on rural livelihoods, and how local people manage climate risks in 28 rural communities in Cambodia, the Lao PDR, and Viet Nam. It also explored the potential of climate risk financing strategies to build community resilience.

The study found that agrarian communities are often beset by droughts, floods, and storms, which sometimes severely damage livelihoods.  Nearly all these communities already face considerable socioeconomic challenges and severe climate events can tip many into extreme poverty. Nearly all of the rural households have some means of managing climate and other risks through diversified farming practices, social capital networks, and reliance on public assistance. But they are ill-equipped to cope with severe climate shocks.

The study’s main conclusion is that a mix of climate financing risk mechanisms are needed to effectively protect rural communities from destructive climate events, even though these mechanisms come with considerable financing and organizational requirements. There is potential to incentivize household saving schemes, and create disaster risk funds at the community, national, and even subregional levels. The CEP’s 2016 publication Risk Financing for Rural Climate Resilience in the Greater Mekong Subregion examines this issue, presents findings, and offers recommendations for the greater use of risk financing.

Climate risk financing, along with climate proofing of rural infrastructure, are two investment projects to be prepared by the CEP under its 2018–2022 strategic framework and action plan.

“Households from the Koh Kong coastal zone reported as much as a 90% loss in economic income from paddy rice due to seawater intrusion events.”
-- Risk Financing for Rural Climate Resilience in the Greater Mekong Subregion. Page 18. (2017).


Publish Date: 31st March 2018

See more content: Climate Change GMS

See also

Consultation Workshop on GMS Sustainable Agriculture and Food Security Program (SAFSP)

3 to 4 April 2019
Event

GMS Sustainable Agriculture and Food Security Program (SAFSP): The proposed TA will build on accomplishments of the two phases of the Core Agriculture Support Program and support the implementation of Strategy for Promoting Safe and Environment-Friendly Agro-Based Value Chains in the GMS and Siem Reap Action Plan, which was endorsed by the GMS Agriculture Ministers in late 2017. The SAFSP interventions will focus on areas such as (i) climate-smart and gender-conscious agricultural value chains, (ii) food safety and quality, and (iii) water-food-energy nexus in a warming world (through the adoption of climate-friendly agricultural adaptation practices and technologies).

 

SAFSP will focus on ADB’s value addition in advancing the use of advanced digital technologies, leveraging investments and applying integrated solutions on the safe, environment and climate-friendly agro-based value chains in the GMS. The TA will assist GMS towards becoming a more integrated, prosperous, inclusive, resilient and sustainable subregion, by focusing on principles such as “food safety for all, climate-friendly agriculture, inclusiveness of small farmers, gender empowerment, corporate social responsibility, good governance, benefits for all GMS countries, and integration with ASEAN”.

 

The SAFSP will have the following themes to be implemented over 5 years:

 

      1.          Greening of agribusiness supply chains

      2.          Inclusive and gender-conscious food value chains

      3.          Financing climate-friendly agribusinesses

      4.          Food safety and quality standards, certification and traceability

      5.          Cross-border animal health and value chain development

      6.          Water for food security in a changing climate

      7.          Agricultural adaptation in the context of water-food-energy nexus

 

The Asian Development Bank (ADB) organized a workshop on the GMS SAFSP on 3-4 April 2019in Kunming, People’s Republic of China. The workshop was divided into six sessions, where each session discussed (i) key challenges for each seven themes, (ii)  current status (e.g. policies, building capacities and mobilizing investment for infrastructure), and best practices that could be replicated, (iii)  key priorities for action, and (iv) advantages or disadvantages in adopting a regional approach.

More than 80 participants attended. Delegates included senior government officials from 6ADB developing member countries, senior staff from international and regional development organizations, including ADB, non-government organizations, academia, and the private sector.

The agenda and presentation materials can be downloaded below.

 

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Consultation Workshop on GMS Climate Change and Environment Sustainability Program (CCESP)

1 to 2 April 2019
Event

Greater Mekong Subregion (GMS) Climate Change and Environment Sustainability Program (CCESP): The proposed knowledge and support technical assistance (TA) on CCESP will build on the key achievements of two phases of the Core Environment Program and support the implementation of the GMS Core Environment Program Strategic Framework and Action Plan 2018-2022, which was endorsed at the Fifth GMS Environment Ministers’ Meeting held in 2018. The CCESP will focus on creating enabling conditions to leverage additional investment in priority areas such as (i) green technologies and sustainable infrastructure; (ii) natural resources and ecosystem services; and (iii) green growth, climate resilience and disaster risk management.

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