Tackling exposure: Placing disaster risk management at the heart of national economic and fiscal policy

The document highlights that global economic disaster losses rose by 200% over 25 years, with losses from weather-related disasters doubling every 12 years. It argues that ex-post relief is unsustainable and advocates for ex-ante risk reduction through comprehensive risk assessments, fiscal planning, and sector-level mainstreaming. Key tools discussed include the CAPRA GIS platform and the CATSIM model for evaluating fiscal vulnerability. The guide emphasizes that while risk financing (insurance and reserve funds) is useful, it must be paired with land-use planning and building codes to effectively reduce exposure.

• Global average economic disaster losses have increased by 200% over the last 25 years in inflation-adjusted terms, primarily because more people and assets are located in areas exposed to natural hazards.
• Losses from weather-related disasters are estimated to be doubling globally every 12 years.
• Disasters have more pronounced macroeconomic impacts in lower-income countries due to higher economic vulnerability, dependence on natural capital, and governance shortcomings.
• In Honduras, Hurricane Mitch in 1998 caused asset losses of approximately $2 billion (18% of capital stock) and created a 'GDP gap' that amounted to about 6% to 9% of potential GDP by 2004.
• Economic exposure to disasters is increasing faster than wealth creation and GDP per capita, particularly in Latin America and South Asia, due to rapid urbanisation, coastal migration, and the loss of natural ecosystem buffers.
• Risk financing mechanisms, such as sovereign insurance and reserve funds, are insufficient on their own and can create disincentives for risk reduction if not integrated into wider economic planning.
• Mexico has pioneered the use of sovereign risk financing and the FONDEN budgetary programme to manage fiscal liabilities from natural disasters, using long-term data collection and risk modelling.
• The Caribbean Catastrophe Risk Insurance Facility (CCRIF) serves as a regional pool to provide governments with immediate liquidity after hurricanes and earthquakes, though it still lacks strong incentives for ex-ante risk reduction.
• Effective disaster risk reduction requires legislation that is coherent across sectors, allocates sufficient finance, and mandates periodic risk reassessments and enforcement of building codes.

APA

Mitchell, D. T., Mechler, D. R., & Harris, K. (2012). Tackling exposure: Placing disaster risk management at the heart of national economic and fiscal policy. Climate and Development Knowledge Network. http://cdkn.org/wp-content/uploads/2012/05/CDKN_Tackling-Exposure_Final-WEB4.pdf

Chicago

Mitchell, Dr Tom, Dr Reinhard Mechler, and Katie Harris. Tackling exposure: Placing disaster risk management at the heart of national economic and fiscal policy. Climate and Development Knowledge Network, 2012. http://cdkn.org/wp-content/uploads/2012/05/CDKN_Tackling-Exposure_Final-WEB4.pdf.

Wikipedia

{{cite report |last1=Mitchell |first1=Dr Tom |last2=Mechler |first2=Dr Reinhard |last3=Harris |first3=Katie |title=Tackling exposure: Placing disaster risk management at the heart of national economic and fiscal policy |publisher=Climate and Development Knowledge Network |date=May 2012 |url=http://cdkn.org/wp-content/uploads/2012/05/CDKN_Tackling-Exposure_Final-WEB4.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mitchell2012tackling, author = {Mitchell, Dr Tom and Mechler, Dr Reinhard and Harris, Katie}, title = {{Tackling exposure: Placing disaster risk management at the heart of national economic and fiscal policy}}, institution = {Climate and Development Knowledge Network}, year = {2012}, month = may, url = {http://cdkn.org/wp-content/uploads/2012/05/CDKN_Tackling-Exposure_Final-WEB4.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }