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Forecast-based Financing: Developing triggers for drought

Bengtsson, Toke LU (2018) VBRM15 20181
Division of Risk Management and Societal Safety
Abstract
Forecast-based Financing (FbF) is a rather new concept within the humanitarian world, which enables actors to act before a likely disaster, based on forecasts. In this study, two scoping studies and five interviews with FbF experts were conducted to find out how to develop useful triggers for drought. The study finds that the triggers must be contextualized, as drought differ a lot across the globe. To accommodate the complexity of drought both meteorological data, as well as societal data, such as market analysis should be used as triggers. Impact and vulnerability analyses should also be conducted and integrated when developing the triggers since they are key for the understanding of where the hazard potentially can evolve into a... (More)
Forecast-based Financing (FbF) is a rather new concept within the humanitarian world, which enables actors to act before a likely disaster, based on forecasts. In this study, two scoping studies and five interviews with FbF experts were conducted to find out how to develop useful triggers for drought. The study finds that the triggers must be contextualized, as drought differ a lot across the globe. To accommodate the complexity of drought both meteorological data, as well as societal data, such as market analysis should be used as triggers. Impact and vulnerability analyses should also be conducted and integrated when developing the triggers since they are key for the understanding of where the hazard potentially can evolve into a disaster. FbF requires extended cooperation between the stakeholders and therefore, how best to include the stakeholders in the project and enhancing their ownership of it must be considered. Despite the promising future of FbF, there are still some challenges that must be overcome when developing an FbF drought project. First, the lack of a universal drought definition causes confusion and potential problems for the collaboration in a project. Secondly, there is a lack of data in many of the settings where FbF is being implemented, which makes it difficult to develop useful and accurate triggers. (Less)
Popular Abstract
The thesis sets out to explore how the rather new concept of Forecast-based Financing (FbF) can be designed to be used in drought management. Forecast-based Financing was formalized as a concept in 2015 by the Red Cross Movement and the World Food Programme. In FbF forecasts, mostly climatic and meteorological, are used to trigger actions before a disaster occurs, to mitigate or prevent damages and losses of this disaster. Thus, the disaster is managed in a more proactive way than traditional disaster risk management and the loss of life and property is reduced. So far, most FbF projects have focused on so-called rapid-onset disasters, such as floods and cyclones, but there is a growing interest in also apply the concept to slow-onset... (More)
The thesis sets out to explore how the rather new concept of Forecast-based Financing (FbF) can be designed to be used in drought management. Forecast-based Financing was formalized as a concept in 2015 by the Red Cross Movement and the World Food Programme. In FbF forecasts, mostly climatic and meteorological, are used to trigger actions before a disaster occurs, to mitigate or prevent damages and losses of this disaster. Thus, the disaster is managed in a more proactive way than traditional disaster risk management and the loss of life and property is reduced. So far, most FbF projects have focused on so-called rapid-onset disasters, such as floods and cyclones, but there is a growing interest in also apply the concept to slow-onset disasters like droughts which are creeping in over weeks or months. The aim of the thesis was therefore to find out how triggers can be developed for a drought FbF project. A trigger is the threshold which will determine when it is time to commence proactive actions towards a likely disaster. By doing two scoping studies and five interviews with FbF professionals a set of important factors to consider emerged. It was thus found that to forecast drought, meteorological forecasts alone are not enough. Two of the key factors mentioned by many were vulnerability towards drought and impact of it since they will determine if the meteorological conditions will turn in to a disaster. Also doing market analysis of certain crops and livestock and other socio-economic parameters were highlighted as feasible factors when developing triggers. However, some challenges exist that make drought trigger development difficult. First, there is no universal definition of drought, which causes confusion among practitioners and results in drought often being mistaken as food insecurity. Furthermore, in many of the areas where FbF is most needed, there is a lack of data which is being used to feed information to the triggers. Despite the challenges FbF is regarded by many within the humanitarian field as a vital and much needed tool for future disaster risk management to alleviate human suffering from disasters throughout the world. (Less)
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author
Bengtsson, Toke LU
supervisor
organization
course
VBRM15 20181
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Forecast-based Financing, FbF, drought, trigger
language
English
id
8947941
date added to LUP
2018-06-14 12:28:20
date last changed
2018-06-14 12:28:20
@misc{8947941,
  abstract     = {Forecast-based Financing (FbF) is a rather new concept within the humanitarian world, which enables actors to act before a likely disaster, based on forecasts. In this study, two scoping studies and five interviews with FbF experts were conducted to find out how to develop useful triggers for drought. The study finds that the triggers must be contextualized, as drought differ a lot across the globe. To accommodate the complexity of drought both meteorological data, as well as societal data, such as market analysis should be used as triggers. Impact and vulnerability analyses should also be conducted and integrated when developing the triggers since they are key for the understanding of where the hazard potentially can evolve into a disaster. FbF requires extended cooperation between the stakeholders and therefore, how best to include the stakeholders in the project and enhancing their ownership of it must be considered. Despite the promising future of FbF, there are still some challenges that must be overcome when developing an FbF drought project. First, the lack of a universal drought definition causes confusion and potential problems for the collaboration in a project. Secondly, there is a lack of data in many of the settings where FbF is being implemented, which makes it difficult to develop useful and accurate triggers.},
  author       = {Bengtsson, Toke},
  keyword      = {Forecast-based Financing,FbF,drought,trigger},
  language     = {eng},
  note         = {Student Paper},
  title        = {Forecast-based Financing: Developing triggers for drought},
  year         = {2018},
}