Scientific and economic rationales for innovative climate insurance solutions

Hoeppe, Peter; Gurenko, Eugene N.

doi:10.3763/cpol.2006.0643

Cited by 13 publications

(7 citation statements)

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“…95 It is not obviously appropriate for slow-onset problems and creates moral hazard by reducing incentives to mitigate climate change. Catastrophe insurance is particularly limited.…”

Section: Compensation For Loss and Damage Under The Warsaw Mechanismmentioning

confidence: 99%

Climate justice, loss and damage and compensation for small island developing states

Adelman¹

2016

JHRE

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“…95 It is not obviously appropriate for slow-onset problems and creates moral hazard by reducing incentives to mitigate climate change. Catastrophe insurance is particularly limited.…”

Section: Compensation For Loss and Damage Under The Warsaw Mechanismmentioning

confidence: 99%

Climate justice, loss and damage and compensation for small island developing states

Adelman¹

2016

JHRE

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“…Insurance-related approaches, in combination with a wide range of others at local, national, regional and international levels, can contribute to creating a space of certainty within which improved ex-ante decision making is possible Hoppe and Gurenko 2006). By creating a secure investment environment, insurance instruments can enable productive risk-taking on the part of individuals and governments, and in this way contribute to mitigating disaster-induced poverty traps and foster climate-resilient development.…”

Section: A Space Of Certainty Allowing For Improved Ex-ante Planning mentioning

confidence: 99%

Exploring and Managing Adaptation Frontiers with Climate Risk Insurance

Schäfer

Warner

Kreft

2018

Climate Risk Management, Policy and Governance

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This chapter aims to inform the Loss & Damage debate by analysing the degree to which insurance can be used as a tool to explore and manage adaptation frontiers. It establishes that insurance can be used as a navigational tool around adaptation frontiers in three ways: First, by facilitating the exploration of adaptation frontiers by contributing to a framework for signalling the magnitude, location, and exposure to climate-related risks and providing signals when adaptation limits are approached. Second, by supporting actors in moving away from adaptation limits by improving ex-ante decision making, incentivising risk reduction and creating a space of certainty for climate resilient development. Third, by aiding actors in remaining in the tolerable risk space by facilitating financial buffering as part of contingency approaches. However, we also find that insurance against the risks of climate change in market terms possesses several limitations. We therefore suggest the embedding of insurance in a comprehensive climate risk management approach accompanied by other risk reduction and management strategies as key principle for any international cooperation approach to respond to climate change impacts. Keywords Loss & Damage • Resilience • Climate risk insurance Comprehensive climate risk management 13.1 Introduction The idea of adaptation to climatic stressors has emerged as a mainstream risk management strategy to help maintain human-ecological systems in a "safe operating space" (Röckström et al. 2009). However, emerging literature underpinning

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“…Market mechanisms may work less well in developing countries, particularly because there is often limited risk assessment information, limited scope for risk pooling, and little or no supply of insurance instruments. In such circumstances, governments may need to create enabling environments by helping to estimate risk, helping to develop training programs for insurer's staff, and generally promoting awareness among the population at risk (Linnerooth-Bayer et al, 2005;Hoeppe and Gurenko, 2006;Cummins and Mahul, 2009;Hazell and Hess, 2010).…”

Section: Transferring and Sharing 'Residual' Risksmentioning

confidence: 99%

National Systems for Managing the Risks from Climate Extremes and Disasters

Lal¹,

Mitchell²,

Aldunce³

et al. 2012

Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation

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Table of Contents This chapter assesses how countries are managing current and projected disaster risks, given knowledge of how risks are changing with observations and projections of weather and climate extremes [Table 3-2, 3.3], vulnerability and exposure [4.3], and impacts [4.4]. It focuses on the design of national systems for managing such risks, the roles played by actors involved in the system, and the functions they perform, acknowledging that complementary actions to manage risks are also taken at local and international level as described in Chapters 5 and 7. National systems are at the core of countries' capacity to meet the challenges of observed and projected trends in exposure, vulnerability, and weather and climate extremes (high agreement, robust evidence). Effective national systems comprise multiple actors from national and sub-national governments, private sector, research bodies, and civil society, including community-based organizations, playing differential but complementary roles to manage risk according to their accepted functions and capacities. These actors work in partnership across temporal, spatial, administrative, and social scales, supported by relevant scientific and traditional knowledge. Specific characteristics of national systems vary between countries and across scales depending on their socio-cultural, political, and administrative environments and development status. [6.2] The national level plays a key role in governing and managing disaster risks because national government is central to providing risk management-related public goods as it commonly maintains financial and organizational authority in planning and implementing these goods (high agreement, robust evidence). National governments are charged with the provision of public goods such as ensuring the economic and social wellbeing, safety, and security of their citizens from disasters, including the protection of the poorest and most vulnerable citizens. They also control budgetary allocations as well as creating legislative frameworks to guide actions by other actors. Often, national governments are considered to be the 'insurer of last resort'. In line with the delivery of public goods, national governments and public authorities 'own' a large part of current and future disaster risks (public infrastructure, public assets, and relief spending). In terms of managing risk, national governments act as risk aggregators and by pooling risk, hold a large portfolio of public liabilities. This provides governments responsibility to accurately quantify and manage risks associated with this portfolio-functions that are expected to become more important given projected impacts of climate change and trends in vulnerability and exposure. [6.2.1] In providing such public goods, governments choose to manage disaster risk by enabling national systems to guide and support stakeholders to reduce risk where possible, transfer risk where feasible, and manage residual risk, recognizing that risks can never be totally eliminated (high ...

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Scientific and economic rationales for innovative climate insurance solutions

Cited by 13 publications

References 0 publications

Climate justice, loss and damage and compensation for small island developing states

Climate justice, loss and damage and compensation for small island developing states

Exploring and Managing Adaptation Frontiers with Climate Risk Insurance

National Systems for Managing the Risks from Climate Extremes and Disasters

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