Extreme Natural Events Mitigation: An Analysis of the National Disaster Funds in Latin America

Claudio Fabian Szlafsztein

doi:10.3389/fclim.2020.603176

Abstract

This paper reviews, compares, and analyzes the legal and institutional framework of Latin American government insurance systems for disaster risk. Data and information are obtained through an intense examination of disasters database, the scientific literature and legal framework of administrative and operational procedures, and mainly sources of financial funds related to disaster risk management. The results demonstrate that all countries, with the exception of Ecuador and Chile, legally establish some form of fund by their own legislation and regulation, as a total or partial form of financing the management of natural disasters, particularly those classified as post-disaster recuperation and reconstruction practices. North and Central American countries have more complex and well-structured funds, presumably based on their history of natural disasters and high social vulnerability. The funds are composed of initial values defined by law, annual contributions of general budgets, donations, and the financial gains of resources deposited into bank accounts. The paper concludes that the unavailability of required resources in an emergency situation has led Latin American countries to choose disaster funds as a primary disaster risk management financing strategy. However, the uncertainty of natural disaster occurrence is one of the main obstacles to the use of public financial resources in prevention and preparedness strategies and actions, increasing even more with the inclusion of climate change uncertainties.

Highlights

Climate changes affect natural processes, increasing the magnitude and frequency of extreme events, and the characteristics of disasters of natural origin (Banholzer et al, 2014; Hallegatte, 2014)
Adaptation is one of the main strategies adopted by the population, various economic sectors, urban areas, and governments in the face of climate change risk scenarios and natural disasters (Solecki et al, 2011; Burke and Emerick, 2016)
The objective of this paper is to review, compare, and analyze the legal and institutional framework of Latin American government insurance systems for disaster risk, in order to increase knowledge of financing strategies and instruments used to address the challenges associated with the disaster risk following extreme natural events, in scenarios of climate change

Summary

Introduction

Climate changes affect natural processes, increasing the magnitude and frequency of extreme events, and the characteristics of disasters of natural origin (Banholzer et al, 2014; Hallegatte, 2014). Adaptation is one of the main strategies adopted by the population, various economic sectors, urban areas, and governments in the face of climate change (extreme events) risk scenarios and natural disasters (Solecki et al, 2011; Burke and Emerick, 2016). It involves a wide range of behavioral adjustments (involuntary or planned) that households and institutions make—including practices, processes, legislation, regulations, and incentives—to mandate or facilitate changes in socio-economic systems, with the aim of reducing vulnerability to extreme events and disasters (Smit et al, 1999; Füssel, 2007). In large-scale disaster cases, countries that lack sufficient resources are forced to request aid from other countries and international or non-governmental organizations (Becerra et al, 2014; Wei et al, 2019)

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Discussion

Conclusion