S2 Ep 2: Breaking the cycle of response and recovery

In 2016, Cyclone Winston devastated Fiji – flattening villages, cutting power, and leaving hundreds of thousands in urgent need. But as the crisis unfolded, aid stalled. Bureaucracy delayed funding, costing time and lives. 

Nine years later, the system remains broken. Disaster response is fragmented, and vulnerable nations are left waiting. With foreign aid shrinking and the next crisis inevitable, how can we fix it before it’s too late? 

In this episode, Tortoise editor Jeevan Vasagar talks to Kathy Baughman McLeod and Dan Lund about how pre-arranged financing could finally break the costly cycle of response and recovery. 

Available on Spotify and Apple Podcasts.

Counter Crisis is brought to you by the Centre for Disaster Protection, which helps countries find better ways to manage disaster risk – protecting lives, livelihoods, and economies before crisis strikes. 

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Transcript

Counter Crisis - Episode 2

Intro 

In 2016, Cyclone Winston tore through Fiji, flattening villages, cutting power lines, and leaving hundreds of thousands in urgent need of help. It was the most powerful cyclone ever recorded in the Southern Hemisphere.

“It left a trail of destruction, winds were blowing with gusts of up to 325km/h ripping trees from the ground. Torrential rains downed power lines, flood waters penetrated buildings including hospitals where patients had to be moved to safer areas.” (link 0.53 - 1.15)

Fiji had faced cyclones before. But never like this.

The devastation was immediate – and so was the need for aid. People had lost their homes, their schools, their access to clean water. Yet help wasn’t coming fast enough. Instead of acting, the international system stalled.

To unlock emergency relief funds, Fiji’s government had to navigate a tangle of overlapping agencies – each with different approval processes, conditions, and priorities. The delays cost time they couldn’t afford.    

“Establishing the basics is the priority, many without homes are sleeping in schools. Schools won’t be schools again here for weeks or months. Children’s worlds have been turned upside down.” (link 2.03 - 2.15)

Nine years on, Fiji is still recovering. The system that failed then hasn’t changed, in fact it may be worse.. Disaster financing remains fragmented. Vulnerable nations are sidelined in decision-making. The US has made a pledge to cut 90% of American foreign aid. 

And the next climate crisis? It’s only a matter of time.

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Interview

Jeevan Vasagar: I'm Jeevan Vasagar from Tortoise. I'm joined by Cathy Boffman McLeod. She's the CEO of Climate Resilience for All, which is a gender focused climate adaptation non profit. It's dedicated to the protection of women and vulnerable communities from the impacts of extreme heat.

Hi, Kathy. 

Kathy Baughman McLeod: Hi. Nice to see you, Jeevan. 

Jeevan Vasagar: Welcome. And I'm also joined by Daniel Lund. He's Special Advisor on Climate Change to the Fijian government. Hi, Dan. 

Dan Lund: Hi. 

Jeevan Vasagar: Dan, can you just start us off by describing the impact of Cyclone Winston on Fiji? What exactly happened? 

Dan Lund: Yeah, thank you, Jeevan. I guess just to give a sense of the scale of this, this event just days before Cyclone Winston hit Fiji, we had thousands of dead fish coming up on the beaches across Fiji due to the extreme heat. When Cyclone Winston first came into contact with Fiji, it actually clipped the islands and continued to  wards Tonga. And then due to how hot the ocean was, it actually turned back to the complete U turn and came back and hit Fiji very directly across the Viti Levu, one of the main islands and up to across that island.

We're talking about wind speeds that put roofing iron through telephone poles due to how strong it was and really the impact was unprecedented, affecting a huge percentage of the population and, and ultimately causing a loss of approximately 30 percent of Fiji's GDP in the space of 24 hours.

Jeevan Vasagar: And that's obviously a huge economic impact. What was the impact on people? 

Dan Lund: Many people were left without homes,  huge devastation of the communities where their sort of basic infrastructure was, was, was destroyed. Um, overnight. Luckily, there was a fairly low death toll given the strength of event due in part to the ability of communities to shelter in caves and take some precautionary action.

But even with this, the social impact was devastating, lasting years. And even today, we still have infrastructure and areas of the country that have still been affected with entire forests that were destroyed overnight. 

Jeevan Vasagar: And Dan, just how challenging was it for Fiji to get access to or to navigate disaster financing in the wake of Winston?

Dan Lund: So essentially everyone had some degree of impact that they had to deal with at a personal level, whether you were a disaster manager. Or a farmer. So there was a huge amount of complexity to this task. And what, you know, the real challenge when financing is not prearranged or there and ready to go is that you have to kind of cobble together a response from a, from a, from a range of different donors.

And a lot of this support comes retrospectively. Maybe some of it comes through two weeks, some of it comes through three months, six weeks later. And you really can't do a very good job planning a response like that without having an understanding of what your budget is.

Jeevan Vasagar: When Cyclone Winston struck Fiji how many different international agencies was your country dealing with? 

Dan Lund: I think by  three or four months into the response,  that there would have been Nine to 10 sort of bilateral donors that had sort of responded to, to sort of the UN call for support.

There would've also been the, the, the agent development bank world Bank and a number of other,  sort of international organizations including the, the un,  central Emergency Response Fund. That would all have  been kind of co-opting different support for Fiji. 

Jeevan Vasagar: And how difficult was it for Fiji at that time to balance and to deal with all of those donors?

I mean, clearly the help was needed and wanted and you are doubtless grateful for it, but was it a practical challenge for you? 

Dan Lund: The challenge with relying on the sort of solidarity response from a range of donors is that that funding comes in. At different times. It has different conditions linked to it. Um, and really, when you're sitting down and reactively trying to work out what you can do for the education sector or the water sector or for schools or those that have been directly impacted physically from the disaster.

So, you know, if you consider what's needed and where the resources can be positioned strategically ahead of the disaster and you and you have a way of kind of bringing together that response and planning it, it's, it's, it's much more effective rather than having to essentially.

Time your response based on when money is coming in from, you know, 12 different sources. Um, so, so, so really, when you see the scale of disaster, you want to be focused on being as effective as possible in the response and covering as many areas as possible when you're also having to look backwards towards the different sources of financing and what is eligible under each kind of arrangement.

And when funding is going to be available, it creates another level of complexity. 

Jeevan Vasagar: And is prearranging finance the main answer to that or do you think there are other answers? 

Dan Lund: I think it's pre arranging finance, but also noting that if, if there is finance that's pre arranged, it incentivizes,  developing a more robust response.

I mean, you don't go and, and design, you know, a 10 billion, a 10 million response you know, ahead of a disaster that hasn't occurred if you don't know that that level of finance is going to be available. So there's really a different posture that, you know, countries need to take at a national level if these size events are going to occur where a significant amount of your economy is wiped out overnight.

Jeevan Vasagar: Kathy is what Dan saying chiming with your experience. I mean, from your experience when disaster strikes, what are the big bottlenecks that stop funding from reaching communities quickly?

Kathy Baughman McLeod: Well, first I'll say how much pressure governments are under financially and capacity wise to be able to respond.

So that just starting there. And then thinking about which communities are more susceptible. There's disproportionate burden. These storms and floods and fires and heat waves don't hit. And so an understanding of which communities, where they are, and what's driving that vulnerability is really important in the way that we think about getting that aid to them.

The other piece is that almost 70 percent of disasters are predicted, and 2 percent of those disasters are financed in advance.

Jeevan Vasagar: Dan, why, why is it so difficult to get to get finance prearranged? 

Dan Lund: Yeah, I think there's, there's a few different factors.

So I think in certain areas, especially in the Pacific, we do have challenges with actually producing. Um, the model. So we have, we have the total understanding that disasters are a certainty, but actually coming up with the correct kind of metrics. So the parametrics, the triggers, you know, the, the, the under understanding of what is it that that needs to be,  the sort of thresholds that you need to set around wind speed, et cetera.

Um, coming up with those design can be complicated in the Pacific islands due to the sort of the array of impacts that are being faced. So Yeah. That there is that issue with ensuring that we have credible models in which to base these products on. The other side of it is a little bit less technical, and that's more the sort of political economy of the way sort of disaster aid flows and functions.

So for a very long time, I think there's, there's, the, the, the practice has been that, you know, when there's been major disasters in the Pacific, there has been  pretty upfront support from donors very unable to kind of predict what that support would be, but there's a sort of a solidarity that would come where, Where donor countries would provide some form of aid and really it's about getting out of that mindset um of of of waiting for for that that sort of support and solidarity to come post disaster and recognizing that  uh having Financing in place and being able to have plans that can be activated immediately Really increases the effectiveness of the response and prevents that kind of piecemeal you know,  co opting of different financing and a slower response.

And we know that if you receive 10 after a disaster, that could have the same utility as receiving 20,  two weeks later. So that, that, that speed of response is really important.

Jeevan Vasagar: Kathy, what can international institutions do to increase access to prearranged finance? 

Kathy Baughman McLeod: Well, Dan just hit on something important, that money right away has more value than money, you know, two weeks later we need to socialize the idea of it.

From our side, when we're focused on women in vulnerable communities, an understanding and quantification of the immense benefits that come with the prearranged financing and the the lives saved the trauma that doesn't happen the assets and livelihoods lost that Um, alone should motivate the community of international organizations and all of this constellation of actors around this work to move toward forecast based or anticipatory financing. And this is a huge tool that we could use to have such a positive impact, but it's going to take socialization, normalization, data to support.

And I do think Dan's point about data sources is really important. And maybe we can come back to that in a minute.

Jeevan Vasagar: From the point of view of low and middle income countries What are the main barriers to accessing this kind of finance?

Dan Lund: I think part of the, the barriers for, for low to middle income countries is, is ensuring that there's actually  products that can be responsive to the specific context and needs.

So though there are huge amounts of potential with pre arranged financing. It does, it does require the kind of localization and sort of regional efforts to, to ensure that we have the right types of products. Um, I think in, in the Pacific, we have quite a,  an array of different risk profiles. So for instance, we have the Atoll nations that are actually,  way outside of the the cyclone.

Um, areas of the Pacific and they are much more affected by drought and the risk of sort of a coastal flooding due to too high tides. And then you have an area where we have highly cyclone vulnerable countries. So really making sure that these products and what's on offer and what banks etc can provide is really responsive to those different types of contexts.

Um, and it is much more complicated,  really in some ways to design some of the flood products that, that arise, you know, when floods arise from array, array of factors such as,  heavy rainfall and, and in confluence with a high tide and a full moon, those types of factors are really important for the Pacific, but really a lot of the traditional ways that these, these These products have been factored in insurance, et cetera, need to be adapted to the concepts because really, there's there's a huge amount of complexity that we need to look at when multiple hazards collide and create the impact.

So often, you know, over the last few years. sort of some of some of the ways that parametric insurance has been offered has been almost oversimplified for the Pacific. Um, looking just at wind speed alone,  really doesn't capture the confluence of different factors. So if we are, you know, hit by a smaller event,  one month and then the next month there's another event.

The impact of those two events actually has a compounding factor rather than just the the risk of there being a sort of one in 10 event.

-        Bring in music

Scripted

Jeevan: Dan just mentioned a key instrument in disaster finance: parametric insurance – a financial tool that’s becoming increasingly important in crisis response.

Parametric insurance is designed to provide rapid payouts after a disaster based on predefined triggers. Instead of relying on damage assessments, which can take weeks or months, this insurance pays out automatically if a specific threshold – such as wind speed, rainfall, or earthquake magnitude – is exceeded. The goal? To bypass the delays of traditional insurance claims and get money where it's needed, fast.

In Africa, the African Risk Capacity (or ARC), a specialized agency of the African Union, has helped countries respond to droughts, often triggered by parametric insurance. In 2023, it paid out $48 million to member countries. Here’s Lesley Ndlovu, CEO of the African Risk Capacity, speaking about the impact of pre-arranged finance in 2020:

“ARC was set up in 2014, and in our existence we have made payouts to seven different countries, paying out $61million in drought relief efforts. Insurance has a 4 times multiplier effect. So for every 1 dollar we pay in insurance claims, there’s a 4 dollar impact on the economy.” (Link)

While parametric insurance helps, it’s often not enough to just have money available. Ensuring the programmes in place are localised and contextualized so that they meet the needs of the communities they are targeting is also crucial. 

-        Bring music out

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Jeevan Vasagar: Dan, how do you think it is that we can ensure that prearranged financing of this kind has more local leadership? 

Dan Lund: It's really not just about the finance itself. It's about incentivizing countries to develop the national systems they need to deal with these issues on a long term basis. So over time there's this Unhelpful dependency, I guess, on responsive you know, reactive, um  responses being reactive to disaster events, but really what we see is that there is no longer this, this linear kind of disaster risk disaster management cycle where there's an event, there's responses, recovery as I said before, we're, we're currently, we're always in a kind of a process of both responding, recovering, preparing, and recovering. All at the same time. 

So this is no longer about, you know, single events. It's really about an ongoing process where we need to be dealing with these impacts. So we really need prearranged financing to be available to actually incentivize the development of national systems on a long term basis that can help to provide the disbursement mechanisms to support people to support small businesses.

To be able to respond quickly after both major events and also the more problematic, kind of confluence of different factors that can lead to a strain on, on the population and, and, and society at large. So I think, it's not just about the finances, it's about that finance being there to incentivize governments to develop long term systems because these issues aren't going away.

And as we've said earlier in the program. Um, you know, disasters are a certainty and that's really the posture in which we need to address these issues. 

Jeevan Vasagar: And Dan, could you tell me a little bit more about some of the climate finance solutions that Fiji has been working on?

Dan Lund: So Fiji's, we looked at a variety of different kind of, as we call it, homegrown solutions. So part of it we, you know, looking at kind of longer term responses to loss and damage and issues that are really quite systemic, such as the loss of land due to sea level rise.

So we've set up a climate relocation of communities trust fund, which helps basically,  communities to relocate to different areas of land that have extremely exposed to disaster events. Um, and where all adaptation options have been exhausted. So this fund is one of the first in the world to kind of put in place this national response to sort of the human mobility crisis that climate change, it's bringing about in the Pacific.

Um, we've also begun,  sort of looking at, at small. Um,  parametric insurance schemes for farmers. So looking at  ways that payouts can be made to, to farmers via mobile phones after a disaster event occurs. So this is,  you know, very small pieces of microinsurance. So you'd pay something like a hundred dollars at the beginning of the year, but then there'd be the potential of a 10 x payout on that.

So a thousand dollars if your sort of small holder farm is. It's affected by certain events such as heavy rainfall or high wind speed, while also then looking at larger kind of national level parametric insurance schemes for, you know, if a cyclone enters a certain area and reaches a wind speed as Kathy had described before.

So we're really trying to look at the different layers of support that's provided. But as I said before, you know, part of the challenge is having the the right data to base these products on because once you, once you create the kind of models, you really need to make sure that they are consistent with reality or else you're sort of putting money into a scheme that might not pay out or, or it might not be triggered.

Um, and so understanding exactly how these risks are evolving becomes quite a, quite a challenging process. But certainly we're, we're doing a lot to look at innovative ways to use these tools and put greater emphasis on prearranging finance rather than receiving finance reactively and based on the goodwill of others.

Jeevan Vasagar: What role can international institutions play? I mean, we've talked, we've touched on the role of the World Bank and the IMF. Kathy spoke about them earlier, but in your view, what role do you think they could play in supporting locally led solutions?

Dan Lund: I think there's a very important role that these institutions can play and, and really it's about  you know, looking slightly beyond just the sort of provision of liquidity post disaster and looking more at this, as I've mentioned, sort of the national systems and the social protection requirements that really should be built into the way pre-arranged financing is deployed.

it's really about making sure that you know, the likes of the World Bank and the Asian Development Bank and donor partners really make that concerted effort to try to put more finance into the prearranged space.

Jeevan Vasagar: Kathy, since the start of the year, we've obviously seen a really dramatic shift in U.S. development aid policy,  the effective closure of USAID. What impact is that going to have on climate resilience efforts in vulnerable countries? 

Kathy Baughman McLeod: It will have immense impact. The billions and billions of dollars that are helping communities sustain and prepare for climate disasters if that money is no longer available, that makes those communities less safe, less secure.

Um, it also means more human migration from Um, communities that,  farming communities that no longer work and that people need to migrate for economic opportunities. 

Jeevan Vasagar: Dan, what does this look like from Pacific countries point of view? 

Dan Lund: I think it's, it's, it's very concerning.

You know, not least as it really changes sort of the understanding of how the Pacific and the US can interact on some of these key issues that are linked to key priorities such as  managing the impacts of climate change. So it raises real questions about you know the alignment of policies and, and really the issue that is at, at the core of really the.

The concerns and priorities of the Pacific? I think the impact on usaid, obviously we have you know, certain, certain areas of our, of our interaction with the US where that, that USAID. A relationship is very important. Um, other areas that are less dependent on it. Um, but, but I think really what is you know, concerning at this stage was,  the, the, the plan, sort of a scale up in USAID in the Pacific for looking at disaster response  from a finance perspective and also from Uh, sort of the operational and planning perspective.

So there was a huge amount of expected support that was due to flow into the region over the next five years, which has now been completely mothballed. So it really opens up a gap and kind of disrupt some of the planning across our, our sort of,  countries and donor interactions, because when support is expected to come in, usually there's, there's a space made for it.

Jeevan Vasagar: Cathy, we've seen  insurers pulling out of states in the U. S. like California and Florida. Do you think we're likely to see increasingly that risks around the world become uninsurable? And if so, what do countries need to do to respond? 

Kathy Baughman McLeod: Yes, that is clear. And as the risks grow, the cost to transfer those risks, which is essentially what an insurance product is, You know, we have a risk we can hold ourselves, and you can call that being self insured, but you also want to have financial protections for the worst of the worst things that happen.

And so, as the size of those worst of the worst things continues to grow, as Climate change driven by unchecked emissions. in January, we were looking at a global average temperature of 1. 75 above the pre industrial level where we set in the Paris agreement. We want to go no further than plus 1.5 degrees centigrade, and we've got to 1. 75 just in January of 2025 alone. So we're breaking heat records. El Nino, this weather phenomenon that kept things quite hot for the last two years has receded, and it's still hot. And so scientists are are wondering why is it, why do we continue to heat beyond what the IPCC,  the, you know, the UN climate scientific body has, has predicted.

And so the bigger thing here is we need to reduce those risks. And yes, we should stop emitting greenhouse gases and stop burning fossil fuels and make the transition in a more accelerated way, but everything in the political economy, as Dan said, is going the other direction. And so the question is, can we reduce the risks in communities so that people in local economies can withstand?

Jeevan Vasagar: We've spent a lot of time talking about storms, but I just want to shift the focus a bit to talk about extreme heat. And also to mention the fact that you're joining us on this podcast from Ghana.

So firstly, just tell us what are you doing in Ghana? 

Kathy Baughman McLeod: Well, we are here to host a West African journalist training around extreme heat and health and gender and how to write about and depict extreme heat. It is one of the most challenging climate hazards as it is silent and invisible. Um, it's a, it's a stress and a shock.

It is,  doesn't have a government agency. It doesn't have a name, the way we name cyclones, although we've experimented with, with,  naming, which I think is  a very strong way to build awareness of heat. Um, in terms of the way it's landing disproportionately on people. Women are profoundly disproportionately impacted by extreme heat.

And what's really interesting about a lot of these insurance schemes that we've seen and the way that the financial system understands these risks, it's about assets. And heat is a lot about the human body. And so, when you were talking, Dan, about the need for data sources, you know, the first thing that comes to my mind is the way that we need to have access to morbidity and mortality data.

You know, understanding how many people are dying to be able to predict the effect of a heat event onto a community. And there's so much to learn about extreme heat. It  is not just the temperature, it's the nighttime temperatures which are also rising, and at a more accelerated rate in urban areas than our, you know, we think about the Paris Accord and the 1.5,  nighttime temperatures are rising like 7 degrees. And when a billion people don't have access or more to to cooling. And so, what does that mean when you wake up and your hand eye coordination is reduced, you feel sick, you're slow at work, you make mistakes, people get hurt, killed, and all that sort of stuff.

So heat and insurance and heat and risk, it's almost like a new field and lots to learn. 

Jeevan Vasagar: So if we're talking about  a crisis that is very slow moving, like heat, and perhaps affects people most who are outside the formal economy or affects children or affects day laborers, how do you apply some of these instruments like prearranged finance to, to this particular stress?

Kathy Baughman McLeod: Well, we experimented with a parametric policy, which is when the heat hits a certain level and I, and I want to point out back to this data point that if a woman is standing in the market on black asphalt and the, temperature gauge that the weather station is 50 kilometers away from her.

And it's telling us that it's 42 degrees. Her experience may be that it's more like 48. In where she's standing and so data sources close to where a person is experiencing this heat is, are, are, are important and one of the ways around that and I'm going to get to the insurance and this instrument is a wearable Fitbit so that we can see what the, the body is experiencing and we love to see those Fitbits and those instruments once we build the confidence in them that they become the triggers for payouts for insurance policies.

And so you would have something calibrated to the human body and where, Okay, where, that person is. You can use sensors and that sort of thing. Um, but we experimented with 50, 000 mostly outdoor workers in eight different trades with a union in India in three different states. And these workers, they are informal women workers.

It's so hot that they're in grave danger of illness and death, and there are many, many stories of, they have a rash on their body every single day. They have headaches. They have infections. They have blisters. Many report losing their pregnancies, having miscarriages. These are profound effects, and we devised an insurance policy that would pay out when it was too hot for them to work, and it would pay to their bank accounts.

to not work or to work less, and we combined that with a cash layer of social protection. So we have insurance at a higher level of temperature trigger, a social protection at a lower level where we still know there's impact, and an early warning system designed with and for them, so that they have advanced notice.

Jeevan Vasagar: That sounds like a brilliant innovation Kathy And i'm also very jealous that you're in Accra and getting to eat the best food in West Africa Apologies to our listeners in Nigeria. Please don't write into us okay.

This is the moment in the podcast where the two of you get to rule the world and i'll come to you first Dan And ask you if you could make One change to the Global Disaster Financing System, what would that be? 

Dan Lund: Well, I would certainly target anything I did around reducing the fragmentation and ensuring that the way that the finance is deployed can be Much more locally led and context defined.

We often have basically blueprints that you can choose to take up or not take up and and really I think we when it comes to these issues. Everything is about context, the impacts are very much about what's happening in that specific location, you know, the different cultural and societal factors as well as the environmental factors.

So really, we need to change the kind of power dynamics and ensure that there's much more potential for demand led solutions where countries can build. Um, you know, national risk response systems. They can build, you know, ways of dispersing support to the to their people and communities and private sector and look to the international financial system to come on board to support those initiatives at the moment, really, to fully engage with the range of options there.

You need to be embracing fragmentation. You need to be taking you know,  the time to essentially work out how to calibrate a range of different little pots of money. And I did say in an article recently that it's kind of like fighting a raging fire was with dozens of fire extinguishers here.

You're trying to do something really important that needs to be brought together and cohesive, but you're having to do it through a range of different external systems and requirements. So really, until we incentivize and really empower countries to look at these issues in a long term way and say, look, we don't just need a payout and then work out where that money goes.

Jeevan Vasagar: Thanks Dan, and Kathy the same question to you. What's the one change that you would make to financing disasters?

Kathy Baughman McLeod: I would forgive all debt to every low income country that they have had to borrow as a result of climate disasters. I would make women 50 percent of every decision making seat across the disaster risk financing landscape. And I would require that every leader engaging in disaster risk financing at any jurisdictional level had to go through a risk and insurance literacy program,  to understand better the landscape, the tools and be a better consumer on behalf of their residents and citizens for this essential, essential package of support for their country. 

Jeevan Vasagar: Okay. That's three changes, but they all sound like they're much needed. Um, Kathy and Dan, thank you both very much. Great talking to you. 

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Outro

When funds are available before a disaster strikes, response efforts can be faster, more effective, and ultimately save more lives. But as we’ve heard, accessing these vital funds remains a huge challenge – one that governments, aid organizations and financial institutions are still working to solve.

In our next episode, we’re taking a closer look at the pre-arranged financial products already in use in some of the most climate-affected regions in the world. What’s working? What’s not? And what can we learn from these models to build a more resilient future?

Joining us will be Elizabeth Riley, Executive Director of the Caribbean Disaster Emergency Management Agency, and Colin Bruce, Special Envoy for Humanitarian and Development Affairs at the International Committee of the Red Cross. They’ll share firsthand insights into how climate disasters are affecting the Caribbean and the financing mechanisms that have proven to be most effective when a disaster strikes.

That’s next time on Counter Crisis.