Risk financing for climate resilience (2013 onwards)

Rural households and communities in the GMS employ a wide range of strategies to minimize the impact of climatic shocks. These include crop and labor diversification, personal savings, investments in semi-liquid assets such as livestock, and informal risk pooling arrangements among peers.

While helping communities cope with events with low and moderate impacts, these strategies may be insufficient as weather-related shocks become more extreme and frequent with climate change. A lack of effective climate risk financing mechanisms creates a cycle of vulnerability and compromises long-term development. To deal with extreme shocks, many poor households are forced to incur additional debts, distress-sell productive assets, reduce food expenses, and cut education spending. These strategies deplete productive assets, drive poorer households into chronic poverty, and undermine their capacity to adapt to climate change long-term. 

CEP is investigating the role of risk financing in climate change adaptation strategies for rural communities in the GMS. Initial work is a scoping assessment to identify viable local-level financial instruments and strategies that could provide households with financial protection. Community Development Funds will be looked at as a potential mechanism for risk financing initiatives such as savings, micro-insurance, and 'risk pooling.' The focus is on selected communities involved in the Biodiversity Conservation Corridor project in Cambodia, Lao PDR, and Viet Nam.  

Resources

File Name Size Modified
Concept Note​-CEP Phase II Climate Change Adaptation.pdf 236 KB 18-12-2013
Concept Note​-CEP Phase II Risk Financing for Climate Resilience.pdf 228 KB 18-12-2013
CC Risk Financing Report​-Key Findings.pdf 3 MB 15-06-2015
CC Risk Financing Report.pdf 7 MB 15-06-2015
Household survey data.zip 5 MB 11-05-2016
Census data in Lao and Cambodia 2008 ​- 2009​_1.zip 1 MB 11-05-2016

Publish Date: 16th September 2013

Last Updated: 11th May 2016


See also

Vulnerability and adaptation to climate change in GMS rural communities

1st June 2012
Activity

Rural communities in the GMS are particularly vulnerable to climate change. While there is considerable indigenous knowledge within communities on managing climate-related risks, understanding how a community’s vulnerability profile will change from climate and non-climate risks is essential for empowering local people to develop strategies for a climate-resilient future.

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