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Financial arrangements for addressing losses and damages: A disaster risk reduction primer

Research reports

Written by Vikrant Panwar, Emily Wilkinson, Lena Nur

Hero image description: Damage caused by Hurricane Irma in Road Town, on the British Virgin Island of Tortola, 12 September 2017. Photo: Russell Watkins/DFID (CC BY 2.0)

The decision by countries to establish loss and damage funding arrangements and a fund was a welcome one. It is important that existing funding arrangements, including those used and applied for disaster risk management (DRM), inform the ongoing deliberations on operationalising the decision.

The United Nations Office for Disaster Risk Reduction and ODI have therefore worked in partnership to produce this primer to highlight some existing good practices.

The report follows a risk management approach to addressing losses and damages, building on in-depth case studies of a selection of countries, and offers a framework for further discussion.

It proposes a national loss and damage finance framework for extreme weather events and for slow-onset processes based around the following concepts:

  • Risks can be avoided or un-avoided and they may, in certain circumstances, be unavoidable;
  • Loss and damage can be economic or non-economic;
  • Loss and damage can be direct (immediate) or indirect (knock-on effects), requiring different types of finance;
  • The volumes of finance needed will increase over time.