Approaching disaster risk financing in a structured way

This discussion paper presents a structured approach to Disaster Risk Financing (DRF) in the EU Member States and describes the key elements needed to better understand, plan for and manage the fiscal cost of disasters. The paper proposes a step-by-step approach to DRF, building on previous analysis on the main concepts and ways to reduce and limit the fiscal cost of disasters.

The discussion paper concludes that:

• The aim of this discussion paper is to contribute to a shared understanding of the necessary DRF steps and stages of development;
• The paper proposes to consider new elements (conditional disaster compensation, leveraging existing tools to reduce the administrative burden, institutional arrangements, etc.) for the design and implementation of DRF, and highlights areas relevant for national authorities when assessing, developing or reforming their DRF approach;
• Current DRF practices could be improved to follow a more structured and articulated logic across steps and actors.