59 it is critical to build climate and disaster

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59. It is critical to build climate and disaster resilience into national policies and development assistance going forward. While it is recognized that this comes with an upfront investment cost, well- designed actions can be more cost-effective in the long run than disaster relief. 21 The benefits of avoided and reduced losses can outweigh investment costs on average by about four to one. 22 In addition, more focus is needed on ex-ante adaptation to long term climate change. Over the past two decades only 4 cents of every dollar spent on development aid was invested in defending that aid from the impact of disasters. 60. Capturing multiple benefits for development and climate change. Development finance can be more effective when development interventions enable climate benefits to accrue alongside other economic benefits. Many climate change mitigation actions have strong local co-benefits in terms                                                             20 Building Resilience: Integrating Climate and Disaster Risk into Development, World Bank, 2013 21 Foresight: Reducing Risks of Future Disasters – Priorities for Decision Makers. Final Project Report. The Government Office for Science, London. (In all cases, a cost-benefit analysis of risk management is greatly influenced by value judgments on the discount rate, the time horizon over which benefits and costs are accrued, and the inclusion of exclusion of non-monetary outcomes, such as loss of human life), Government of the UK, 2012 22 Reviewing the Economic Efficiency of Disaster Risk Management. Review commissioned by the Foresight Project: Reducing Risks of Future Disasters. UK Government Office for Science, Mechler, R., 2012
  20   of improved local health, productivity, energy security, and reduced economic waste. Opportunities exist to harness these benefits in countries of various income levels, but tend to be more prevalent when incomes are lower, institutions and markets are weaker, and there is a legacy of distortive policies. 23 This presents opportunities to capture development and climate benefits through measures that integrate policy and institutional reforms in development finance support or prioritize funding for projects with development and climate co-benefits. 61. Sometimes actions to capture local co-benefits fail to deliver global “dividends”, including when the benefits of sustainable investments may not be sufficient to justify increased short-term costs when compared to traditional, non-sustainable projects. For example, in some cases, energy investment plans do not emphasize renewable energy and policymakers do not have the option of improving energy access in the country to capture the global climate benefit. In these situations finance may have a role to play, for example in the form of results-based incentive payments (e.g., purchase of carbon credits or allowances, grants, targeted concessional loans or guarantee products) to encourage low-

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