The high price of disasters and how to avoid paying it
Rising costs of disasters
2024 ranked among the costliest years on record with USD 320 billion in losses, driven largely by weather and climate extremes. Every year, more people and infrastructure assets are placed in harm’s way, subject to increasing hazards. The 2025 Global Assessment Report estimates that once we account for ecosystem costs, lost productivity, and cascading effects, disaster costs approach US$ 2.3 trillion each year. Cyclone Winston’s impact on Fiji showed how disasters cause twin shocks of damage and fiscal stress, wiping out 31% of its GDP and forcing debt-reliant recovery. If we only keep responding to disasters, rather than building resilience, we will keep paying more for fewer results.
The 2025 International Day for Disaster Risk Reduction (IDDRR) calls for a course correction: “Fund Resilience, Not Disasters.” For governments that make up the Coalition for Disaster Resilient Infrastructure (CDRI), with support from the Secretariat, this is a practical agenda - integrating climate resilience with fiscal resilience. First, increase funding for disaster risk reduction in public budgets and international assistance. Second, make all development and private investments risk-informed and resilient. Delivering on these two actions can accelerate progress on the Sendai Framework and reduce human and economic losses at scale.
The financing gap
The 2025 global calendar reinforces this agenda, from the Global Platform for Disaster Risk Reduction (DRR) and the Financing for Development Conference, to the G20 and COP30, which call for more ambitious financing mechanisms. The message is consistent: fund resilience to reduce losses and protect budgets, or risk higher costs ahead. Governments often allocate less than one percent of budgets to DRR, Overseas Development Assistance and humanitarian funding remain minimal, and private investment largely overlooks disaster risks. And the result is familiar: new risks are created, existing risks deepen, and fiscal space shrinks after each shock.
Signs of progress
However, there is progress to build on. India’s DRR financing system has grown into one of the world’s largest country-driven DRR financing systems, with the cumulative amount standing at roughly US$ 42 billion, increasingly by almost 50% over six years. Guatemala is incorporating disaster risk reduction into its core economic decision-making. Bhutan, with support from UNDRR and CDRI, aligned its National Plan for Infrastructure Resilience with the 13th Five-Year Plan. Jordan’s National DRR Strategy (2023–2030) requires every ministry and municipality to budget for DRR, while also encouraging private funds to support implementation. Antigua has set up a special fund to finance resilience projects, protect government finances from disaster impacts, and co-finance international initiatives. Grenada’s new Disaster Management Act (2023) further strengthens the regulatory basis for disaster risk financing and integrates resilience into development planning.
Scaling up resilience financing
Drawing on the SIDS Call to Action and CDRI’s inputs to the Baku to Belém Roadmap to 1.3T, the following proposals outline practical actions governments can take to accelerate progress in funding resilience.
- Establish a dedicated global facility for disaster resilient infrastructure (DRI) financing that mobilises catalytic funding, & provides technical assistance, and open knowledge platforms to increase financial viability of resilience investments. The focus should be to help streamline access for vulnerable economies and provide resilience windows within climate funds.
- Integrate resilience metrics into credit ratings, debt instruments, and multilateral development bank (MDB) project pipelines. Certification mechanisms can reduce investment risk information gap and lower premiums. This would allow financial markets to create dedicated resilience funds.
- Strengthen local and country-led platforms by empowering ministries, municipalities, and utilities with embedded resilience units and data hubs. Regional capacity accelerators and sovereign resilient infrastructure pipelines can ensure that resilience funds reach where they are most needed, while also securing long-term operations and maintenance.
On this International Day of DRR, let us commit to funding resilience, and make disaster losses the exception, not the trend.
Arighna Mitra is Specialist – Advocacy at the Coalition for Disaster Resilient Infrastructure (CDRI), where he advances multilateral engagement, programme development, and high-level policy dialogue on disaster resilience and climate adaptation. With a background in architecture and design, Arighna has a growing expertise in nature-based solutions, sustainable finance, and intergovernmental processes.