AT-5

Solution Cluster 5.3.2

Climate Risk Reduction and Management

Climate plays a key role in crises. Therefore, climate action is a critical entry point for transforming and protecting food systems. SC 3.2 Climate Risk Reduction and Management (CRRM), focuses on actions to mitigate the impacts of climate variability and climate-driven disasters deploying climate information solutions to trigger action, programming, relief, and finance, as opposed to SC 1.3, which includes compound risks and crisis. Information and knowledge about climate-related events, trends or forecasts are used in CRRM for climate-resilient decision-making, to reduce the negative impacts of climate on climate-sensitive sectors (i.e. agriculture), communities or geographical areas1. CRRM is in line with the general concept of disaster risk management, which involves activities related to i) Risk Prevention (measures to avoid existing or new hazards); ii) Risk Management (mitigation, i.e., limiting the impact of hazards, and preparedness, i.e. anticipate, respond to, and recover from the impacts of hazards); iii) Risk financing aims to position financing so that it may be reliably available to address the consequences of risks as they occur. This includes the establishment of contingency reserves and risk transfer. The latter aims to transfer the financial consequences of risk from one party to another (e.g., insurance). CRRM, therefore, covers a diverse set of measures and approaches, from early warning systems to, the provision of climate information, seasonal forecasts, or analytical approaches to evaluating the probability of climate risks, to financial instruments, education, and knowledge development, capacity building, national planning and investment, infrastructure design or strengthening institutional and legislative arrangements. While many of these approaches and concepts are represented in SC 3.2 by the submitted game-changing solutions, three priority approaches can be identified: 1-Climate Insurance and Finance Products, 2-Climate Information Services, and 3-Early Warning Systems. These three approaches build the three thematic coalitions of SC 3.2. 
1Travis, William R., and Bryson Bates. “What is climate risk management?.” (2014): 1-4.

About this Solution Cluster

Ideally, a resilient and sustainable food system would support multiple Sustainable Development Goals (SDGs), among others, SDG2 (zero hunger) SDG13 (Climate Action), SDG12 (Responsible production and consumption), SDG15 (Life on Land), and SDG16 (Peace, justice and strong institutions). However, tremendous numbers of people are undernourished, stunted, overweight, or obese,  an enormous amount of food lost and wasted, and food systems negatively impact local and global ecosystems. Our current food systems do not deliver sustainable food and nutrition outcomes for social, economic, or environmental aspects. Climate and food systems are in a reciprocal relationship: On the one hand, climate-related disasters, next to other shocks, are a major threat to the stability of global, national, and local food systems. On the other hand, unsustainable food systems  cause deforestation or soil degradation (contributing to climate change), and food production is responsible for 19 to 29% of global greenhouse gas emissions2. An unsustainable food system is vulnerable and cannot cope with sudden shocks. Furthermore, food systems failures can lead to crises (e.g., food insecurity, malnutrition, loss of biodiversity, desertification, etc.). Crises can then reinforce exogenous shocks (e.g., create or intensify conflicts over resources). It is reasonable to assume that many crises are rooted in food system failures and that climate plays a key role in this. Hence climate action, including CRRM to prevent and manage risks, as well as position financing, is a critical entry point for action. These climate actions, potentially the most transformative ones, all rely heavily on climate information to trigger action, programming, relief, and finance.

2Vermeulen SJ, Campbell BM, Ingram JSI. Climate Change and Food Systems. Annual Review of Environment and Resources. 2012; 37: 195–222. 

Climate Information Services comprise the generation, provision, and contextualization of climate information for decision-making. As Climate Information Services reduce climate vulnerability by enhancing information access, knowledge exchanges, and networks, it is key for adapting to climate variability and extremes. Focusing on the use of historical information, seasonal forecasts, and long-term climate projections, Climate Information Services are important tools in climate risk management at local, national, regional, and international scales in sectors like agriculture, forestry, or health, among othersClimate Insurance and Financing Products can reduce the immediate and long-term financial consequences associated with extreme weather events such as floods or drought, hence supporting mechanisms to reduce vulnerability. In contrast to traditional insurances, index-based insurance payouts are based on an index, e.g. rainfall or vegetation levels, that is measured transparently and objectively, obtainable at low cost, not manipulable, and highly correlated with exposures to be transferred.

When an index threshold is reached, the insured party receives compensation within a short time after the event without the need for proof of loss. Such insurance products enable immediate liquidity, and can be adapted to target a specific climate risk. Early Warning Systems are integrated systems of hazard monitoring, forecasting, and prediction, disaster risk assessment, communication and preparedness activities, systems, and processes that enable individuals, communities, governments, businesses, and others to take early actions to reduce disaster risks in advance of hazardous events. All these actions, among others and together with respective finances as well as standard operating procedures, reduce vulnerability and, have the potential to transform food systems towards resilience.

The thematic coalitions of SC 3.2 comprise game-changing solutions related to Climate Insurance and Finance Products, Climate Information Services, and Early Warning Systems, among others. The largest and most consilidated coalitions include:  “InsuResilience Global Partnership for Climate and Disaster Risk Finance and Insurance Solutions (IGP)”, putting forward an actionable and transformative agenda to strengthen the resilience of poor and vulnerable people from the impacts of disasters and protect their lives and livelihoods. It does so by promoting the scale-up of pre-arranged, predictable financing for early action, relief, and recovery embedded in climate and disaster risk management strategies. Among the partners are the World Bank Group, the UNDP, OECD, WFP, Red Cross Red Crescent Climate Centre, and Munich Re, as well as member states such as Canada, Bangladesh,  Ethiopia,  EU,  Fiji,  France,  The Gambia, Germany and many more. The “Blueprint for Digital Climate-Informed Advisory Services (DCAS)”, launched in July 2021, provides a roadmap for getting DCAS to scale and reaching an additional 300 million smallholders by 2030. Its objectives are, among others, to strengthen food security and build climate change resilience, by supporting smallholder farmers to adapt their traditional practices to ongoing and future climatic changes. Among the partners are GCA, WRI, WFP, the WBCSB, Columbia University, and CCAFS/CGIAR. The “Risk-informed Early Action Partnership (REAP)” integrates risk-informed early action for a wide range of climate- and non-climate-related shocks and stresses, to make 1 billion people safer from disaster by 2025. People living in the last mile in 50 countries are covered by financing and delivery mechanisms connected to effective early action plans, ensuring they can act ahead of predicted disasters and crises. Among the partners are the UK, Belize, Jamaica, UNDP, UNDRR, IFRC, UNEP, WFP, CGIAR, GCF, FAO, and many more.

Climate change poses a significant threat to food system resilience, food security and poverty reduction. This solution cluster has transformative potential to protect food systems, food security and smallholder livelihoods. This cluster has significant existing support with coalitions including CCAFS/ CGIAR, WFP, FAO and UK. Your support can protect those most vulnerable to climate change.

Next to the three main coalitions, further initiatives under SC 3.2. include:

  • WINnERS agricultural supply chain de-risking programme
  • The Index-based livestock insurance
  • Production finance in disaster areas of South Africa

Regarding existing initiatives, the three largest solutions are already designed as big coalitions. InsuResilience works through a multi-stakeholder coalition with more than 100 members that have joined the partnership since its launch at the 2017 UN Climate Change Conference in Bonn. The Blueprint for Digital Climate-Informed Advisory Services is a Climate Information Services community of investors and governments, among others, that build partnerships allowing for the development, deployment, and improvement of DCAS at scale. Finally, REAP, launched at the UN Climate Action Summit in September 2019 with the support of 24 convening partners and 15 countries, brings together an unprecedented range of stakeholders across the climate, humanitarian, and development communities. Bringing these large coalitions together under the umbrella of CRRM, SC 3.2 will not only offer countries a broad pool of knowledge, tools, and potential for global collaboration and engagement but also contribute to achieving the SDGs 2,12,13,15 and 16 to make food systems more sustainable.

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