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Story 2.12

Climate Change Mitigation Laws

Strong Governance and Institutions to Cope with Natural Disasters

The magnitude 8.0 earthquake that ravaged a large part of Peru in August 2007 left behind a massive toll: 7,000 families without homes or safe water, 220,000 children without schools, collapsed ground transportation, and destroyed infrastructure.

Such natural disasters are not isolated incidents, especially in Peru, one of the most vulnerable countries in the Region to such events. Disasters such as droughts, floods, earthquakes, and volcanic eruptions affected Peru 109 times between 1970 and 2010, causing 74,000 deaths and affecting some 18 million people. In addition to the enormous impact on the population, there is a devastating effect on the national economy. For example, the two most severe episodes of the El Niño phenomenon in 1982–83 and 1987–88 caused losses of nearly US$6.8 billion.

Peru’s experience shows why it is so important for countries to put the necessary measures in place to cope with natural disasters. One way to reduce vulnerability is to strengthen governance and institutions, since the country’s ability to address the risks associated with, and respond to, such disasters is directly related to its institutional capacity and governance.

A 2008 diagnostic study conducted by the IDB found that Peru had a weak regulatory, institutional, and budgetary framework that constrained strategic and coordinated disaster risk management. In response, the Bank worked with the country through a series of policy-based loans to support the development and implementation of a modern legal and institutional framework to improve disaster risk management. Under this forward-looking approach to risk, disasters are considered more a problem of a poorly planned development, as opposed to a humanitarian response. As such, disaster response agencies must join efforts with key actors involved in development, such as ministries of economy and finance, housing, the environment, agriculture, health, and education.

One result of the reform supported by the IDB was the creation of Budget Program 0068 for Emergency Response and Reduction of Vulnerability. This achievement puts Peru in the forefront in the Region in this field, since few countries have budget programs that enable them to track the amount invested in risk management and evaluate its benefits. As a result of this change, the portion of the national budget for prevention and mitigation of natural disasters increased by 1,200 percent from 2011 to 2014. Furthermore, the program was able to improve the country’s governance with regard to disaster risk management and adaptation to climate change, increasing Peru’s Index of Governance and Public Policy in Disaster Risk Management (iGOPP) from 31 percent to 51 percent.

Since climate change translates at the local level into an increased risk of natural disasters, the supported reforms contribute to improve the national framework for climate change adaptation. The policies put in place give Peru the needed capacity for the mitigation of and adaptation to climate change, reducing the adverse effects on the population and the national economy.

Story by:
Sergio Lacambra, disaster risk management lead specialist in the Environment, Rural Development and Disaster Risk Management Division at the IDB.

This results story is based on the Project Completion Report of a Programmatic Policy-Based Loan comprised of operations PE-L1086 (closed in November 2010); PE-L1104 (closed in October 2011); and PE-L1138 (closed in December 2014).

Continue reading Chapter 2 - Protecting the Environment, Responding to Climate Change, Promoting Renewable Energy, and Enhancing Food Security