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

GMS Working Group on Environment 24th Annual Meeting

1st April 2019

The 24th Annual Meeting of the Greater Mekong Subregion (GMS) Working Group (WG) on Environment reviewed the achievements of the GMS Core Environment Program Phase II and discussed the way forward. WGE AM-24 was hosted by the People’s Republic of China’s Ministry of Ecology and Environment (MEE) with support from ADB through the GMS Environment Operations Center.


The WGE AM-24 was followed by thematic discussions that covered the proposed new programs entitled: "GMS Climate Change and Environmental Sustainability Program (CCESP)" and "GMS Sustainable Agriculture and Food Security Program (SAFSP)" which are aligned with three out of seven operational priorities of Strategy 2030 approved by the Asian Development Bank’s (ADB) Board in 2018.


The CCESP will focus on ADB Strategy 2030’s operational priority: tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability, while SAFSP will focus on ADB Strategy 2030’s operational priority: promoting rural development and food security. Both programs will support ADB Strategy 2030’s operational priority: fostering regional cooperation and integration.


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

1 to 2 April 2019

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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