Bangladesh, a nation on the frontlines of climate change, endures severe and recurrent natural disasters. From cyclones to monsoon floods, the country faces ongoing challenges threatening its people’s lives and livelihoods, infrastructure, and future sustainability. Forecast-Based Financing (FbF) has emerged as a transformative approach to responding to these disaster adversities and climate resilience.
FbF was first piloted in Bangladesh by the Bangladesh Red Crescent Society (BDRCS) in collaboration with the German Red Cross and supported by international agencies such as the World Food Programme (WFP). This approach links early warning systems to pre-arranged funding for flood preparedness, as a pilot in Kerrigan district allowing proactive measures to mitigate disaster impacts. Later, Care International Bangladesh also initiated the FbF programme in the Bogura and Jamalpur districts.
Traditionally, humanitarian aid is delivered after disasters, leaving vulnerable populations struggling to recover from loss of life, livelihoods, and property. This reactive model is financially burdensome and often arrives too late to mitigate damage effectively. Forecast-based Financing (FbF) transforms this approach by integrating early localised warning systems with pre-arranged funding, enabling proactive, lifesaving interventions before a specific climate-induced disaster occurs. This methodology has proven transformative in case of Bangladesh, with people of selected climate change induced distress districts, showing notable progress to withstand climate-induced floods and cyclone impacts significantly better than before and better financial access and capacity, demonstrating its efficacy and potential to address the escalating challenges posed by climate change.
LIVES SAVED, COSTS REDUCED: During the monsoon season of 2020, FbF initiatives facilitated cash transfers to over 10,000 households in climate-induced flood-prone areas along the Brahmaputra river. Families used these funds for early evacuation, securing essential supplies, and safeguarding their homes and livestock. These actions averted catastrophic losses and significantly reduced recovery costs by addressing risks before flooding.
UN Research indicates that every dollar invested in anticipatory action can save between $3 and $5 in post-disaster response and recovery. This cost-effectiveness is crucial for Bangladesh, where climate change-induced disaster recovery often depletes resources that could be allocated to long-term development. Furthermore, proactive measures help protect livelihoods, preventing families from falling further into poverty due to climate-related shocks.
BUILDING RESILIENT COMMUNITIES: In addition to its financial advantages, Forecast-based Financing has made a substantial social impact. Anticipatory measures, such as early evacuation, distribution of hygiene kits, and reinforcement of embankments have saved countless lives during cyclones and floods. For instance, during Cyclone Amphan in 2020, FbF facilitated the evacuation of over two million individuals and prepositioned emergency supplies in high-risk areas, resulting in a significant reduction in casualties compared to similar events in previous decades. FbF initiatives prioritise vulnerable populations, including women, children, and marginalised groups. This emphasis on equity ensures that resources are directed to those in need, fostering trust and cooperation within communities. Furthermore, training programmes integrated with FbF protocols have empowered local populations, enhancing their capacity to prepare for and respond to future disasters.
ENVIRONMENTAL PROTECTION AND CLIMATE ADAPTATION: Forecast-based Financing (FbF) supports environmental conservation and climate adaptation efforts. In the coastal regions of Bangladesh, proactive disaster preparedness measures include planting mangroves, which act as natural barriers against storm surges and help reduce soil erosion. Community-driven water conservation systems and soil preservation techniques mitigate the impacts of droughts and salinity intrusion, contributing to disaster readiness and sustainable resource management. By aligning scientific forecasting with practical interventions, FbF bridges the gap between early warning systems and climate action. This integration enhances the reliability of forecasts and ensures that actions taken are data-driven and impactful.
CHALLENGES TO OVERCOME: Despite its successes, Forecast-based Financing in Bangladesh faces several challenges that must be addressed to maximize its potential. One key issue is the accuracy of forecasts. While advances in technology have improved prediction models, uncertainties remain, leading to occasional false triggers or missed events. Investing in more sophisticated forecasting systems and data-sharing platforms is essential to enhance reliability.
Funding sustainability is another critical concern. FbF initiatives rely on pre-arranged financial mechanisms, but long-term commitments from development partners and governments are necessary to ensure consistent support. Expanding these mechanisms to cover a broader range of climate risks, such as salinity intrusion and heat waves, would also increase the programme’s effectiveness.
Additionally, geographical coverage remains limited. While FbF has made significant strides in flood-prone areas, regions affected by other climate-related hazards, such as droughts and cyclones, require greater attention. Strengthening community participation in designing and implementing FbF programmes can further improve their relevance and efficacy.
A MODEL FOR GLOBAL CLIMATE ACTION: The success of FbF in Bangladesh offers valuable lessons for the global community. By demonstrating how anticipatory action can save lives, reduce costs, and enhance resilience, it establishes a precedent for integrating proactive disaster management into both national and global climate policies. This approach aligns seamlessly with the objectives of the Sendai Framework for Disaster Risk Reduction and the Sustainable Development Goals (SDGs), particularly those related to climate action and poverty eradication. In African nations such as Malawi and Kenya, FbF is already being implemented for drought and flood management, drawing inspiration from Bangladesh’s experience. Similarly, the Philippines has adapted the model for typhoon preparedness by pre-positioning supplies and reinforcing shelters based on forecast triggers. These examples underscore FbF’s scalability and adaptability across diverse contexts and hazards.
Forecast-Based Financing can be viewed as a critical lifeline instrument for millions facing the challenges of climate change. In Bangladesh, FbF has proven effective in saving lives, protecting livelihoods, and enhancing resilience. However, its potential is not fully realised. By addressing challenges such as forecast reliability, funding sustainability, and equitable coverage, we can enhance its impact. As the world faces the effects of climate change, FbF offers a proactive strategy for safeguarding the future. Bangladesh’s success serves as both inspiration and a call to action. The time to scale up and invest in anticipatory action is now-because the cost of inaction is too high.
Dr. Anwar Hossain Chowdhury, Assistant Professor, Bangladesh Institute of Governance and Management (BIGM. [email protected]