Saving money and grief save money for those who are bad before a disaster strike, and overpayments can be one source of it.
As the strongest storm of 2020 that swept lands across the Philippines this past weekend, causing catastrophic wind damage, tidal fluctuations and floods, you might be thinking: “Another terrible but inevitable humanitarian disaster. We can do nothing but to pick up the pieces. “
Typhoon Goni was a terrifying major Category 5 storm that swept through coastal areas three times before mercilessly missing the capital, Manila, and then bullying other parts of Luzon.
A typhoon like Goni is no longer a “once in a lifetime” event. Devastating climate events are occurring more and more and causing more damage than ever before as a result of the climate crisis. As they do so, we need to think of new ways to help people who are climate sensitive prepare for the onset of natural hazards.
But what if there was a way to protect these communities before disasters struck? And what if it could be done by using money already invested in these communities, but using it wisely? And what if it doesn’t even have to come from global aid budgets?
Members of the Zurich Flood Resilience Alliance, including my organization Mercy Corps, which has responded to almost every disaster over the past twenty years, are looking at new ways to help communities prepare for the disaster.
One is the role that overpayments – money sent by family members living in other countries – can play if it aligns with the ‘forecast-based financing’ and platforms they connect with money transfer organizations.
This is because communities enable immediate access to cash before, and not after an extreme event, to take immediate and important measures to reduce disaster risks.
Overpayments are a major source of funding for the developing world, with private financial flows from diaspora communities amounting to more than half a billion dollars, which is three times the amount of global development aid.
The potential to use these payments to help families before disasters is huge. In the Philippines, for example, the money in 2019 amounted to $ 35.2 billion, about 10% of the country’s GDP.
The technology to offer money to families before events such as storms and floods is available. And forecast-based financing is a promising innovation already in use in the humanitarian field, where new technology, data and weather information help predict potentially catastrophic events such as storms and then release funding to aid agencies before crises.
This means we can help communities better prepare for storms and floods and build the resilience of communities. This could include money to evacuate families or livestock to safer places, to strengthen the infrastructure of homes and to store food, medicine and supplies if supply chains are disrupted.
Advances in prediction and early warning systems can alert diaspora communities via SMS about potential threats to family and friends in their home countries. Then let them quickly transfer funds before a crisis with the potential for high humanitarian impact.
It is financially foolish not to do so, as studies show that every $ 1 spent on disaster risk reduction avoids an average of $ 5 in future losses.
After all, the technology already exists. Satellites monitor weather systems, detect droughts, even locust swarms and almost everyone has access to a smartphone and internet connection.
The one thing that is missing are platforms that connect these diverse information systems together.
But we must overcome these obstacles. Our recent research in collaboration with the Red Cross Red Crescent Climate Center and Columbia University’s IRI has found significant potential to connect workers who send money home with early warning.
The importance of individuals retaining the right to decide when and to what extent they should spend their money cannot be overstated. But connecting diaspora communities, money transfer organizations and early warning systems so families can send cash before a natural hazard is a powerful tool to help communities reduce the risks associated with events such as storms and floods.
As overseas development assistance and philanthropic funding have shifted towards immediate response and recovery measures for the COVID19 pandemic, finding innovative financial solutions and partnerships has never been so important.
The climate crisis is causing a confluence of severe humanitarian disasters that will thin out community resources.
However, the consequences of the weather-related dangers do not have to be catastrophic or unavoidable.
However, what is urgently needed are creative partnerships that connect money transfer organizations, early warning systems and diaspora groups to help people better prepare for the growing effects of climate change.
Any opinions expressed in this opinion piece are from the author and not from the Thomson Reuters Foundation.
Aparna Shrivastava is head of climate finance at Mercy Corps, a member of the Zurich Flood Resilience Alliance.