The Need for Greater Financial Liquidity for Disasters' Affected Nations

At the 2022 United Nations Climate Change Conference (COP27) in Egypt, political leaders took a historic step by establishing the loss and damage fund of $750 million, which aims to assist developing countries grappling with the aftermath of climate-induced disasters. When disaster strikes, whether in the form of a hurricane, flood, or wildfire, nations face an immediate and daunting challenge in meeting the urgent needs of their affected populations. Emergency liquidity plays a pivotal role in ensuring a swift and effective response acting as a vital lifeline that can make all the difference.

While $750 million may seem an acceptable amount,  I, having led numerous sustainability projects globally as the Chair of the Consortium for Sustainable Urbanization (CSU);   I can say that this is not nearly enough and needs to be dramatically increased. A stark example were the flash floods that struck Indonesia in 2020 that had significant financial consequences, displacing approximately 60,000 people, with flood related costs exceeding $650 million, including damages to infrastructure, property, and livelihoods.

In such moments of crises, having immediate access to liquid funds is crucial as emergency liquidity allows nations to act swiftly. Such resources fund search-and-rescue operations, provide medical aid, and ensure food and shelter for displaced communities. Liquid resources enable countries to kick start reconstruction efforts immediately, rebuilding infrastructure and utilities that need urgent repair. From clean water to medical supplies, emergency liquidity ensures that basic necessities reach those affected promptly.

While the above mentioned UN loss and damage fund is commendable, it must be adequately capitalized and dramatically increased to be of any real value to disaster struck countries. Nations and donors should step up their contributions to bridge the funding gap, as well as develop robust disaster plans, planning for worst-case scenarios.

There must be a multilateral effort with development banks and international organizations playing a key role in enhancing coordination, innovation, and resource allocation. I know firsthand the value and impact of such cooperation, as this was a major part of the work I led as a member of the UN Social Impact Fund Higher Level Advisory Board (UNSIF-HLAB) and as a strategic advisor to the World Trade Organization (WTO).

As climate crises escalate, emergency liquidity becomes non-negotiable. We must advocate for sustainable urbanization by building resilient cities that withstand disasters, that can cope with humanitarian responses through coordinated efforts to alleviate suffering and recognize that no nation is immune to climate impacts.

The combination of rising sea levels and extreme weather events poses ongoing challenges for us all. Emergency liquidity is not just about numbers, it is about saving lives, rebuilding communities, and securing our shared future.