Aligning funding for early-warning systems with existing climate finance and social protection mechanisms can strengthen policy cohesion and coordination.
In recent years, forecast-based finance mechanisms that release agreed amounts of funding for response activities to imminent hazardous events have been very effective. In 2024, $111 million was released from pools of pre-agreed financing totalling $248 million, reaching 17 million people worldwide. At times, early action is impacted negatively due to the delayed disbursement of funding. Cost–benefit analysis of investment into early, forecast-based action finds that an earlier response can avert suffering and prevent more severe impacts. Furthermore, such an approach also decreases the overall cost of humanitarian response through greater pre-positioning and early procurement. Additionally, pre-planning enables more time for improving programme design to incorporate preventative measures with potential co-benefits – added positive impacts of an action that go beyond its primary goal – in non-crisis times. This might include, for example, investing in infrastructure adaptations and providing climate-resilient crops and supporting agricultural extension services that can improve the access to and availability of food during future shocks. In the context of a warming planet, as disasters occur more frequently and communities face more complex risks, the need for more funding is apparent.
The costs and benefits of anticipatory action can vary depending on the speed of hazard onset and the degree of instability or conflict in the local context. Whereas acting early during rapid-onset events can often offer value by saving lives, slow-onset events present multiple opportunities to respond early and offer various other co-benefits to build resilience beyond saving lives. Response actions to slow-onset or predictable disaster contexts may be able to achieve greater cost-efficiencies due to greater time available for more thorough planning and because fewer system redundancies may be required. Meanwhile, defining the conditions that trigger funding disbursements is more straightforward in direct rapid-onset events (as these are often more predictable in form), allowing immediate mobilization of finances and steps towards early action. However, opportunities for a more effective response are missed in slow-onset hazards due to uncertainties related to forecasts that can delay action. Consequently, identifying obvious disbursement-triggering events is harder for complex risk formations. As such, preparedness and response activities are being developed in a siloed and ad hoc way rather than benefiting from more systemic funding modalities. As a result, responses are constrained in their ability to address the reality of cascading and compound risks faced by communities. This increases the risk of maladaptation practices in response to shocks and will lead to missed opportunities to intervene at the necessary scale and time needed.
Building this further: investments in the anticipatory action ecosystem
Insufficient commitment to overseas development aid in many countries has tangible consequences, most notably, funding gaps that delay the construction (build funding) and progression (fuel funding) of early-warning systems essential for risk preparedness.
Data collection has not been adequately funded to date, despite a recent uptick in support for the use of technological advancements. To ensure that societies are equipped with comprehensive early-warning systems, investments in developing cascading risk knowledge and embedding that into all the components of a multi-hazard early-warning system are needed. Traditionally, ‘fuel funding’ includes various pre-arranged financing mechanisms for response efforts, via pooled funding mechanisms such as the Disaster Response Emergency Fund (DREF), Central Emergency Response Fund (CERF), Nexus’ Anticipatory and Emergency Fund, and the Start Network. Fuel funding is ideally, but not always, provided to pooled funds managed by international organizations. Their disbursement mechanisms require the satisfaction of specific thresholds for different hazardous events. These thresholds are often linked to response activities, enabled by the prompt disbursement of finance to fund this response. New stakeholders are entering this discourse, ranging from the Green Climate Fund, which finances the deployment of multi-hazard early-warning systems within countries, to the insurance industry.
There are opportunities to build complementarities with broader financing mechanisms and to innovate to de-risk investment in early-warning systems. SPARC (Supporting Pastoralism and Agriculture in Recurrent and Protracted Contexts) research found little evidence that anticipatory action funding modalities will be able to play a significant role in preventing or mitigating serious protracted crises due to a complex interplay of trade, economic, political or environmental factors. In multi-hazard contexts, carrying out anticipatory action adequately can be expensive. Because complementarities do exist in building food system preparedness and early action, there are opportunities to align funding for early-warning systems with existing climate finance instruments.
When there are concerns around the availability of aid budgets and the viability of early-warning systems, there is an opportunity for a more comprehensive, innovative approach that uses diversified financing models to ensure sustainability and communities’ access to food.
When there are concerns around the availability of aid budgets and the viability of early-warning systems, there is an opportunity for a more comprehensive, innovative approach that uses diversified financing models to ensure sustainability and communities’ access to food. By seeking complementarity between anticipatory action, resilience and social protection mechanisms (see Box 3), more opportunities arise for policy cohesion, better coordination between stakeholders and strengthened narratives for financing.
There is an opportunity to advance financing mechanisms by blending public and private finance. Public finance activities, such as through climate resilience or disaster contingency funds, can help relieve the demands on pre-arranged finance. Funding to EW4All, the Global Shield against Climate Risk, the Systematic Observations Financing Facility (SOFF), the Climate Risk and Early Warning Systems (CREWS) initiative, the Adaptation Fund and the Green Climate Fund can be utilized to contribute to regional and national anticipatory action roadmaps by building core aspects of anticipatory action and count towards donor contributions based on good faith reporting.
