OCHA-managed pooled funds and loss & damage: OCHA's crucial role in an evolving space, July 5, 2023

PREPARED BY:
ERNESTA SWANEPOEL
BCOM LLB LLM (MARINE & ENVIRONMENTAL LAW)

EXECUTIVE SUMMARY

The Intergovernmental Panel on Climate Change (IPCC) finds that where climate hazards interact with high vulnerability, climate change is contributing to humanitarian crises. It further concludes that “losses and damages will become increasingly difficult to avoid, while being strongly concentrated among the poorest vulnerable populations”. It can be said with certainty that the impacts of climate change are increasing in severity and frequency, and vulnerable countries bear the brunt of this. Drought, storms, cyclones, and floods are all examples of the impacts of climate change that are causing extensive loss and damage, including non-economic losses, such as the loss of lives and livelihoods, and/or economic losses, such as the loss of infrastructure or shelter.

Thus, the climate crisis is already a humanitarian crisis. The gap between these humanitarian needs and the ability of countries and humanitarian actors to respond will widen as warming drives increasingly frequent and extreme weather occurrences, causing groups that are the most vulnerable to suffer losses and damages. This means that in a climate-crisis world where resources are restricted and scarce, humanitarian actors will need to adapt to protect vulnerable groups.

Humanitarian actors have been responding to climate-related disasters long before the world agreed on the existence of climate change and the impacts thereof, yet the world still seems to view responding to disasters and responding to the climate crisis as two parallel tracks.

When climate hazards, or the impacts of climate change (storms/ floods/ droughts/ disease, etc.), occur, disaster follows and humanitarian needs are created. The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) is responsible for bringing together humanitarian actors to ensure a coherent response to such emergencies, including those that are climate related. This means that OCHA coordinates and mobilizes finance for humanitarian action following disasters, regardless of the cause.

By mandate, OCHA-managed pooled funds finance life-saving humanitarian actions. “Life-saving” is the main criterion used to make decisions. Thus, life-saving activities through humanitarian actions are part of the solution to addressing loss and damage associated with the adverse effects of climate change in developing countries that are particularly vulnerable to these adverse effects.

OCHA, in the execution of its mandate, is already fulfilling an expanded role and taking action to address losses and damages through the anticipatory action and the life-saving activities in which it engages when coordinating and mobilizing finance for humanitarian action following a disaster. It addresses the effects of the impacts of climate change on people's lives and livelihoods in fragile and conflict-affected situations by strengthening resilience across sectors, rapidly disbursing funds after the impact of the climate change event is experienced and assisting communities in taking preventative action before shocks occur.

To this end, OCHA-managed pooled funds consist of the Central Emergency Response Fund (CERF),5 which is the global emergency response fund that enables timely and reliable humanitarian assistance to people affected by disasters and emergencies, and 16 Country-based Pooled Funds (CBPFs), which allow donors to pool their contributions into single, unearmarked funds to support local humanitarian efforts.

Since its founding more than 15 years ago, CERF has become one of the fastest, most reliable, and most adaptable methods of providing humanitarian aid and funding in 86 countries. Between 2006 and 2022, it provided these countries (almost 50% of the global total) with humanitarian financing to support action before or after climate shocks.

CBPFs are funds established to help address a particular emergency or a particular country, aiding both national and international non-governmental organizations (NGOs) in addition to UN agencies.

While the United Nations Framework Convention on Climate Change (UNFCCC) is currently focused on addressing losses and damages caused by climate change, including the many different funding arrangements involved, it also appreciates that there is a similar mosaic of solutions to this issue. This report studies OCHA’s role as an integral part of these solutions and in particular its role in coordinating and mobilizing finance for humanitarian action through CERF and CBPFs. It looks at specific humanitarian responses and activities that have been funded by OCHA after a disaster (for example, funding for agencies to provide shelter, food, and assistance for livelihoods and food security) with a view to determining if life-saving activities have co-benefits of minimizing and addressing certain aspects of loss and damage associated with the impacts of climate change. Additionally, the report identifies current areas of focus and opportunities to expand OCHA’s impact. To this end, it brings together data obtained from OCHA, information submitted to the UNFCCC, and analytical findings from desktop research.

Overall, the research shows that through rapid action, OCHA has managed to deliver humanitarian aid to people in need to assist in addressing the impacts of climate change on their lives and livelihoods, even in fragile and conflict-affected situations where there is limited institutional capacity. OCHA has been able to rapidly disburse funds after impacts occur, strengthen resilience across sectors, and assist communities to take preventative action in anticipation of shocks. An important insight gained in terms of the latter is that humanitarian actors need to be creative in scaling up approaches so that action is taken before shocks occur.

OCHA has also begun to monitor CERF and CBPF allocations pertaining to climate shocks, such as cyclones, floods, and droughts. In 2020 alone, CERF and CBPF together channeled more than US$1.75 billion to humanitarian projects.

A preliminary analysis shows that between 2006 and 2022, CERF alone spent more than US$2.16 billion on climate change impacts – in other words, an average of 26% of its finances were dedicated to climate-related emergencies each year. In terms of hazard types, more than US$1 billion has gone to droughts, more than US$500 million to floods, and more than US$300 million to storms.

As the severity and frequency of the climate change impacts increase – in other words, as more disasters occur more frequently – more humanitarian needs will be created. This in turn will cause the global call for humanitarian assistance to increase. In short, OCHA will have to fund more humanitarian operations across a wider range of geographic areas, while reaching more people more frequently and faster, thus placing an additional strain on its funding mechanisms.

OCHA must stay relevant in this evolving space and access crucial funding as and when demand for humanitarian assistance increases. It thus needs to present a viable investment case to attract additional finance through both multilateral and bilateral funding sources. The necessary data is already available to OCHA – it can study activities in affected countries to determine how much was spent coordinating and mobilizing finance for humanitarian action to address disasters that resulted from climate change, and it can identify how much was spent on activities that not only saved lives but also responded to the resultant losses and damages. OCHA is also already actively working to increase its capacity to assist countries to withstand the impacts of climate change and intensifying its funding initiatives to lessen and respond to these effects. In addition, in the field, OCHA has made a significant contribution by promoting climate-smart agriculture and livelihoods, and by enhancing early warning systems, among other initiatives.