Climate risk management – concepts, instruments, effects

Project description

Title: Global Programme on Risk Assessment and Management for Adaptation to Climate Change (Loss and Damage)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Global
Overall term: 2013 to 2021

Small-scale fisheries in Senegal are increasingly threatened by climate change. © Michael Siebert (GIZ)

Context

The effects of climate change are becoming increasingly noticeable and can be seen in both extreme weather events and gradual environmental shifts. Households, settlements, sectors of the economy, infrastructure and ecosystems worldwide are being threatened by climate risks. In spite of the efforts made as part of climate policy, climate protection and specific adaptation measures, residual risks remain that are leading to loss and damage. 

In order to adequately address the important topic of damage and loss, the Warsaw International Mechanism for Loss and Damage Associated with Climate Change Impacts (WIM) was established in 2013 as a component of the United Nations Framework Convention on Climate Change (UNFCCC). The issue is becoming increasingly important due to the growing climate risks and is highlighted with its own article (Art. 8) in the Paris Agreement.

Existing approaches to assessing and handling climate risks have so far rarely touched on loss and damage, the non-monetary costs of climate change and gradual environmental shifts. It is therefore necessary to (further) develop suitable methods and instruments for integrated climate risk management and to help particularly affected countries to implement effective measures.

Objective

German development cooperation and its international partners have access to tried-and-tested concepts for assessing and handling climate risks in regions that are particularly vulnerable to climate change.

Approach

The project develops methods for assessing and handling climate risks. To this end, it has designed the ‘climate risk management (CRM) cycle’, which takes into account both short-term extreme weather events and gradual environmental changes. The approach consists of three stages: 

  1. Analysing and assessing climate risks
  2. Identifying suitable measures and instruments for climate risk management 
  3. Making and implementing decisions
Integrated risk management cycle

Comprehensive and effective risk management combines climate adaptation, disaster risk management and social protection methods as well as market-oriented and innovative financial instruments such as risk financing and climate risk insurance.

The approaches developed are incorporated into existing climate processes (National Adaptation Plans, or NAPs), shared amongst experts and included in German development cooperation. Methods are tested in pilot regions and with partners, and the findings are fed into national and international climate policy processes. The experiences gained help to achieve comprehensive risk management that covers both climate and disaster risks. 

The project has prepared the concepts and methods in the form of a modular training course, which is aimed at decision-makers in the private and public sphere. The training sessions are held in several pilot regions and countries such as the South Pacific, India, Tanzania, Central America, the Mekong Region, Senegal, the Philippines and the Caribbean.

The project also advises the German Federal Ministry for Economic Cooperation and Development (BMZ) on climate risk management. Since it was established in 2013, the WIM has provided BMZ with technical support in the context of the UNFCCC and helped with the annual Conferences of Parties (COPs).

International trainer pool for climate risk management. © GIZ/Loss & Damage Global Programme

Results

The pilot implementation of climate risk assessments in Tanzania (Lake Rukwa) and India (Himachal Pradesh and Tamil Nadu) has delivered an improved understanding of local risks and supports the development of national and regional climate policy. 

A database with over 100 methods for analysing climate risks is available to decision-makers all over the world. Synergies between CRM and gender have also been explored, and the negative impact of climate change on small-scale fisheries, which are important to developing countries, has been investigated. 

An international training pool has been created to be able to offer the training course for high-ranking decision-makers and technical personnel across the world. The content has been integrated into teaching plans at universities in cooperation regions to help boost its reach (mainstreaming).

The project has helped to develop special topics such as climate risk insurance and climate migration for BMZ and has established separate global programmes – InsuResilience and Human Mobility in the Context of Climate Change – for this purpose.

The German contribution to support Fiji’s COP23 Presidency and the organisation of COP23 in Bonn was implemented by the project in 2017. In preparation for COP25, host country Chile has received financial support to create the first national climate risk map and internet platform. 
The project has provided technical and organisational assistance to the WIM expert group regarding comprehensive risk management. It also cooperates with the UNDRR to prepare a technical guide to comprehensive risk assessment.

Last update: May 2021