In September 2026, CETEx participated in two events at the Integrated Disaster Risk Management (IDRiM) Conference in Bali. The conference proved particularly timely. Due to volcanic disruption in Indonesia that affected flights across the region, many of the sessions were delivered in a hybrid format, requiring speakers and participants to adapt at short notice. The irony was not lost on attendees: panels examining resilience to natural disasters were themselves forced to respond to a real-world disruption, providing a reminder that resilience must extend beyond policy frameworks and into practice.
Firstly, CETEx hosted a special session exploring The Economic Case for Building Fiscal Resilience to Natural Disasters. Bringing together researchers, policymakers and development practitioners, the session examined how governments can strengthen financial preparedness and resilience as climate change drives more frequent and severe natural disasters.
The session featured Isabel Lara Miranda, Alia Yusuf and Trishaa Bansal from CETEx, alongside Arief Ramayandi, Senior Research Economist at ADB Institute. The discussion was moderated by Vidya Azzizi from RDI, with contributions from Roki Gangsar Winoto of Indonesia’s Directorate General of Budget Financing and Risk Management and Febri Pasaribu of the Directorate General of Economic and Fiscal Strategy.
Understanding the fiscal consequences of disasters
Opening the session, Isabel Lara Miranda presented research on the fiscal implications of urban flooding in Brazil. Her analysis highlighted how the insurance protection gap (the difference between total economic losses and insured losses) can become a source of fiscal instability: when losses are uninsured, they potentially fall on public balance sheets. This leaves governments increasingly exposed to fiscal risk as climate-related disasters become more frequent and severe. Research presented at the session quantified average annual riverine flood losses across eight Brazilian cities and showcased how upgrading flood protection to a 1-in-100-year standard could reduce these losses, protecting fiscal space.
Drawing on the example of the 2024 Rio Grande do Sul floods, Isabel demonstrated how natural disasters, which are highly localised, create transmission channels to the macroeconomy, negatively affecting public finances through increased expenditure, declining revenues and increased borrowing pressures. The presentation argued that governments are increasingly acting not only as insurers of last resort but also as the primary financiers of disaster recovery, strengthening the case for greater investment in preparedness and risk reduction before disasters occur.
Among the recommendations discussed were the development of comprehensive disaster risk financing strategies, the expansion of Brazil’s development bank (BNDES) toolkit for disaster risk financing and climate resilience, increased adoption of parametric insurance, increased investment in adaptation measures targeted at the most exposed regions, and harnessing Brazil’s digital public infrastructure to strengthen adaptation and insurance.
Converting resource revenues into climate resilience
The second presentation, delivered by Alia Yusuf, explored how Indonesia’s nickel boom could create opportunities to strengthen climate resilience at the subnational level. Focusing on Southeast Sulawesi, Central Sulawesi and North Maluku, the research examined how temporary resource revenues can be translated into sustained investment in adaptation and disaster preparedness.
While Indonesia has become a dominant force in global nickel production, rising hydrometeorological disaster exposure in major nickel-producing regions suggests that adaptation needs are growing alongside economic activity. The presentation highlighted an important policy challenge: ensuring that resource-driven growth contributes to long-term resilience rather than short-term gains alone.
The analysis found that at the subnational level, while mining-related revenues have increased significantly, the share of adaptation spending remains fixed, raising important questions about how governments can better capture and channel resource windfalls towards resilience-building investments. International examples from Chile, Colombia and Peru highlighted existing approaches including stabilisation funds, earmarked revenues, transparency mechanisms and multi-stakeholder planning frameworks that could offer policy lessons for Indonesia and other resource-rich economies.
Social protection as a foundation for climate resilience
Drawing on CETEx research in India, Trishaa Bansal explored how social protection programmes can contribute to climate adaptation and resilience. Her presentation highlighted that many existing social protection schemes already provide significant adaptation co-benefits, supporting livelihoods, infrastructure, water security and agricultural resilience while helping vulnerable communities manage climate-related risks.
The research examined how governments can strengthen climate-responsive social protection by aligning programmes more closely with local risks and vulnerabilities, integrating adaptation considerations into planning processes and mobilising additional finance for resilience-building measures.
During the discussion, Trishaa emphasised the importance of protecting the most vulnerable populations and highlighted lessons from India’s experience with adaptive social protection. She also discussed how tools such as parametric insurance can complement broader resilience strategies when used alongside existing social protection systems and within a wider risk-layering framework.
Building resilience through stronger fiscal policy
The final presentation by Arief Ramayandi broadened the discussion to fiscal policy challenges and opportunities across Asia and the Pacific. Drawing on recent ADB Institute research, he highlighted how climate vulnerability can constrain fiscal space by reducing revenues and increasing expenditure pressures, making it harder for governments to invest in resilience.
Discussion from representatives of Indonesia’s Ministry of Finance reinforced the need for effective resource allocation, strong risk communication and improved coordination between national and subnational governments. Participants also discussed challenges surrounding data availability, fiscal capacity, climate budget tagging and the integration of resilience objectives into longer-term development planning.
Social finance for disaster risk reduction
Later in the conference, CETEx also joined a panel on Social Finance for Disaster Risk Reduction, convened by Dr Rozana Himaz from UCL and colleagues at Resilience Development Initiative (RDI). The session explored how mechanisms like Social Impact Bonds (SIBs) and other outcomes-based financing could support post-disaster health recovery in Indonesia. Drawing on her CETEx brief on parametric insurance in India (co-authored with Joseph Feyertag), Trishaa argued that innovative finance should also address slow-onset and extreme weather risks, not just geophysical disasters, citing India’s pilot programmes and SEWA’s evolution from an initial parametric insurance pilot into its broader Climate Welfare Facility.
She cautioned against overselling these instruments: they are complements to and not substitutes for existing disaster risk and social protection systems. The panel pointed to opportunities for governments, insurers, researchers and development partners to combine tools like insurance, disaster pooling funds and SIBs to close recovery-financing gaps, with CETEx continuing to contribute through its work on climate adaptation and resilience finance.
Looking ahead
A central message emerging from the sessions was that disaster resilience cannot be built solely through post-disaster response and recovery. While emergency financing mechanisms remain important, governments must also invest in preparedness, adaptation and fiscal resilience before shocks occur. Even where emergency relief is in place, the medium- and long-term consequences of disasters, including mental health, disability and chronic healthcare costs, can remain largely undocumented and unfunded.
Across the discussions, speakers highlighted the importance of integrating public finance, adaptation investment, social protection and disaster risk management into a more coherent and proactive approach to resilience. Whether through innovative financial instruments, better risk assessment, stronger fiscal planning, more effective use of resource revenues or targeted support for vulnerable communities, building resilience requires sustained investment and long-term thinking.
As climate change continues to intensify disaster risks around the world, the sessions underscored the need to move beyond financing recovery and towards financing preparedness, ensuring that governments, communities and economies are better equipped to withstand future shocks.
