Forecast-based Financing within the Red Cross and Red Crescent Movement: Persisting barriers and ways forward

Abstract

With the introduction of Forecast-based Financing (FbF) in 2013, the ability and incentive to do early action based on forecasting has increased over the last couple of years. In this study eleven semi-structured interviews were conducted with FbF practitioners of the Red Cross and Red Crescent (RCRC) Movement with the purpose of shedding light on challenges and opportunities associated with the approach. Common understanding and simplified methodology seem to be a precondition for the approach to flourish. While FbF is paving the way towards wider usage of anticipatory action and a more flexible funding system, there are still challenges in terms of: taking early actions based on a probability, forecasting capacity, timely release of funding enabling early actions, and establishing sound collaboration with local authorities. Within the National Societies, the difficulty of grasping FbF and the unequal distribution of capacities at local branches are key challenges to FbF implementation. These challenges could be addressed by mainstreaming FbF into DRR programs, capacity strengthening efforts through trainings and investments in organizational development. The ownership over funding and choice of the early actions and triggers still lies to a large extent within the supporting RCRC partners. One of the upcoming tests for the sustainability of the approach is to ensure that ownership of the process rests within host National Societies and governmental entities, given their contextual knowledge and everlasting mandate to alleviate suffering in their country. Further, evidence over the cost-effectiveness of timelier humanitarian action is needed to increase the limited funding.

Popular Abstract

Forecast-based Financing (FbF) is a new approach to humanitarian action that wants to address recurring challenges humanitarian practitioners in the field experience. In particular, response to emergencies is often affected by early warnings not leading to early actions and delays in access to funding, resulting in a difficulty to meet the needs of the populations at risk. Through systematic use of forecasts, pre-positioned funding and planned early actions FbF is aiming at tackling inefficiencies. While the concept is gaining momentum across the humanitarian sector, practitioners face presenting barriers for fast implementation, advocacy efforts and extending its in-country coverage.
Background

Developped in 2013 by a group of humanitarian organizations including the Red Cross and Red Crescent (RCRC) Movement, FbF is currently being implemented in 16 countries. FbF springs from the realization that humanitarian action should be done in anticipation, as opposed to the inherently reactive humanitarian response. There is an opportunity to reduce fatalities and impacts on livelihoods as well as infrastructure by implementing early actions in the time between a natural hazard is forecasted and has occurred. For example, in the case of a hurricane, to reduce the impact early actions may include tying down rooftops, evacuation of families and livestock to cyclone shelter, and planning for needs in food, water and hygiene of the evacuated population.

Purpose
The purpose of this research is to uncover challenges and opportunities associated with FbF, as perceived by staff of the Red Cross Red Crescent (RCRC) Movement. Eleven interviews were conducted with international, regional and national actors.
Key findings from this study
The research shows that within the FbF community, the disparate use of terminology and disagreement about what FbF should cover becomes a barrier for advocacy of the approach, limiting new potential funding and buy-in. Additionally, respondents have expressed concerns regarding the reluctancy to act without having certainty of the hazard’s impact, this can have an negative impact on the funding availability, something that could be addressed through improvement of forecasting capacity of local Meteorological Organizations and of data collection methods. Additionally, ensuring that local actors i.e. Governmental actors and the local Red Cross or Red Crescent, have full control and responsibility over choosing early actions, danger levels and funding opportunities is a prerequisite for achieving sustainability and scaling up of the approach. However, this process still lies to a large extent within the supporting RCRC partners. Some of the opportunities brought up include mainstreaming FbF into other programs, investing into organizational and individual skills development of the local Red Cross or Red Crescent and wider collaboration with authorities and external humanitarian partners.

Future area of research
FbF is a promising tool with the potential to shift the humanitarian focus from reaction to anticipation, while also promoting an alternative to the current humanitarian funding mechanisms. There is a need for further research to evaluate FbF adaptability towards complex humanitarian emergencies and a wider range of hazards.

• author: Chatenier, Camille and Erichsen, Daniel Ramskov
• supervisor: Magnus Hagelsteen
• organization: Division of Risk Management and Societal Safety
• course: VBRM15 20201
• year: 2020
• type: H2 - Master's Degree (Two Years)
• subject: Earth and Environmental Sciences
• keywords: Forecast-based Financing, Anticipation, Ownership, Capacity development, Ambiguity, Red Cross and Red Crescent Movement.
• language: English
• id: 9026132
• date added to LUP: 2020-08-25 09:54:38
• date last changed: 2020-08-25 09:54:38