Key Recommendations: Building Financial Resilience to Climate Impacts

Key recommendations Governments are facing significant climate-related risks from the expected increase in frequency and intensity of cyclones, floods, fires and other climate-related extreme events. The report “Building financial resilience to climate impacts - A framework for government action to manage the risks of losses and damages” provides a strategic framework to help governments, particularly those in emerging market and developing economies, to strengthen their capacity to manage the financial implications of climate related risks. The goal of the framework is to support sound public financial management strategies that take into account budgetary and financing constraints, and to foster broader actions at the national and international levels. The report examines the role of governments in identifying and assessing climate-related physical risks and their impacts on public finances, and reporting climate-related fiscal risks to promote transparency in public financial management. It discusses how to mitigate those risks through protecting households and businesses, and developing integrated multipronged financial strategies to fund government expenditure needs. Finally, it calls for promoting integrated strategies to strengthen financial resilience at the country and regional levels, and for mobilising development co-operation to strengthen global climate financial resilience. This document provides a summary and overview of the strategic framework. The goal of the strategic framework is to provide guidance for central governments, regulators and international development community on how to manage risks of losses and damages from climate change, from a public financial management perspective.