Incentives for Reducing Disaster Risk in Urban Areas

Experiences in 3 case study areas in Viet Nam, Nepal, and the Philippines indicate that there is an opportunity to leverage existing incentive and/or investment programs to encourage investment in disaster risk reduction.

The rapid growth of urban areas has often resulted in the siting of poorly designed infrastructure and assets in hazard-prone areas, increasing disaster risk.

While a better understanding of disaster risk by urban stakeholders and the use of this information by governments to develop policies, regulations, and financing that prioritize risk reduction are key to increasing public and private investment in risk reduction, there is also a need to offer inducements—or incentives—to encourage investment.

This summary of experiences of Da Nang in Viet Nam, the Kathmandu Valley in Nepal, and Naga City in the Philippines explains:

• what incentives are,
• how they are currently used in the case study areas to encourage investments in disaster risk reduction, and
• how to foster an enabling environment for a successful incentive program.

While these incentives are not designed with disaster risk reduction as the primary purpose, many of them have either indirectly contributed to reducing disaster risk or, with minor modification, could directly contribute to risk reduction.