Standard Operating Procedures for Forecast-Based Financing

There are a number of barriers to effective use of forecasts and implementation of early actions. Firstly, forecasts of hydrometeorological variables, such as river flow or level, need to be translated into a probability of impact, which is the information that is necessary for deciding what action to take. Secondly, there are also institutional and political barriers to using uncertain forecast information, particularly given the perceived high consequences of ‘acting in vain’. In addition, humanitarian organisations and at-risk stakeholders do not have a clear mandate for action based on probabilistic signals of likely losses, and when a forecast is made that indicates a heightened probability of a disaster, are not confident in determining what action is “worth” taking. Lastly, funding sources for forecast-based early action are few; the bulk of funding is available only post-disaster, or through long- term project agreements.

These obstacles are interlinked, for example, an action that needs to be taken two days in advance of a flood would be worth taking if there is confidence in the forecast system out to two days. Therefore determining what actions are worth taking, how to implement those actions and by whom will be in some part related to how far in advance of a disaster the forecast has skill. The guide No. 1 of this manual has shown the process to analyse forecast skills, lead teams and ultimately to define the menu of triggers that will inform which are the danger levels for the activation of the Forecast-based Financing mechanism. In guide No. 2, has shown the process that stakeholders should do in order to prioritize forecast-based actions. This guide No. 3 shows the key elements that should be consider to elaborate an standard operating procedure for the implementation of the selected action(s). 

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