Enhancement of Nationally Determined Contributions in the Context
of Climate and Disaster Risk Financing
Context
Hoping that the catastrophe track for the worst-case climate scenario projected by the
Intergovernmental Panel on Climate Change (IPCC) can still be avoided, climate resilience building and
emissions reduction are more important than ever as nations look to enhance the capabilities of the
most vulnerable people and nations to fight against climate change.
Vulnerable nations need investment to cover mitigation and adaptation programs from the Nationally
Determined Contributions (NDCs) laid out under the Paris Agreement. However, it is important to
realize that the investment context depends on the economics of operating in a system and this is
influenced by the political economy and with it, valuation methodologies, benchmarks, access to
finance, both public (export credits, subsidies or cross-subsidies) and private.
This global disruption and its impact on vulnerable countries has shown the need to balance long-term
benefits with short-term costs. It’s important now to make educated guesses about low-probability
and high consequence events. V20 countries have been seeing a preview of what the rest of the world
may have to face with lots of unknowns and ‘unknowables’. What is clear is that V20 exposure grows
exponentially due to vulnerabilities. Investments made today should not exacerbate the climate crisis
or social inequalities. There is an opportunity to redirect resources in support of economic
fundamentals. Resilience is being able to sustain critical functionality in a more disruptive future
where the volatility and frequency and the impact of external events is much more severe than it has
been.