The rising frequency of climate-related disasters, including the recent U.S. hurricanes, raises concerns over how to pay for recoveries, particularly in poorer countries that have contributed the least to climate change.

Aid needs far surpass available funds. In 2023, humanitarian funding through the U.N. covered only $22 million of the estimated $57 billion needed for disaster-hit countries.

In an op-ed for the Los Angeles Times, Feinstein Research Director Erin Coughlan de Perez discusses a mosaic of initiatives designed to address these funding challenges.

Anticipatory action systems, for example, enable aid deployment based on forecasts, while “index insurance” products trigger payouts when extreme conditions occur, rather than waiting to assess actual losses.

Climate-smart social protection systems also can scale up during extreme weather events, bolstering food security for vulnerable communities.

Although innovative disaster financing mechanisms are promising, they should be coupled with investments in adaptive infrastructure and agriculture to reduce damage from extreme weather events.

Read the op-ed here.