World Video | Defence | Foreign Affairs | Natural Events | Trade | NZ in World News | NZ National News Video | NZ Regional News | Search

 

Insurance Against Ravages Of Climate Change Needed

New Forms Of Insurance Against Ravages Of Climate Change Needed In Poor Nations - UN

New York, Nov 14 2006 11:00AM

Warning that by 2040 the world could witness a year in which losses from droughts, storms surges, hurricanes and floods hit $1 trillion, the United Nations Environment Programme (UNEP) today called for new kinds of insurance and financing, including public-private partnerships, to help developing countries adapt to climate change.

“Widespread insurance cover has been generally confined to developed countries where consumers, businesses and industry have in the past been able to pay for premiums,” UNEP said in launching its new report – “Adaptation and Vulnerability to Climate Change: The Role of the Finance Sector,” produced by its Finance Initiative (<"http://www.unepfi.org">UNEP FI) .


“However, the time has come to forge public-private partnerships to bring new kinds of creative financial instruments to developing countries where the impacts of climate change are likely to hit hardest,” it added, quoting insurers and banks.


“Otherwise, the costs of coping with a rising tide of full scale, climate-linked, natural disasters could outstrip current levels of humanitarian aid putting increasing strain on international aid budgets.”


The report, launched during the final week of the UN Climate Convention in Nairobi, Kenya, cites figures showing estimated overall losses of nearly $13 billion from typhoons which struck China, Japan and the Philippines just from July to September this year.


In Africa, the ongoing drought and floods in Ethiopia and Somalia have left some 280,000 people homeless. Since 2005 the drought has affected an estimated 3 million people.


“It seems likely that there will be a ‘peak year’ that will record losses of over $1 trillion before 2040,” the report says. “In fact, since so much development is taking place in coastal zones, the figure may arrive considerably before 2040.”


It cites some promising initiatives already underway, including one by the UN World Food Programme (WFP) that cover that covered Ethiopian farmers during the March to October season and was designed to pay out if rainfall fell below a key threshold via a finance instrument known as a “weather derivative.”


The pilot scheme, involving a UNEP FI member called AXA, the World Bank and the United States Government, was aimed at preventing communities spiralling into chronic poverty and aid dependency due to drought. Other projects are being examined to help pastoralists, with payments triggered when the condition and availability of forage for livestock deteriorate below a pre-determined point.


The report also highlights how microfinance institutions in India, working with the re-insurer Swiss Re, are helping farmers in Andhra Pradesh use “weather hedges” against lower than expected monsoon rains. Community-wide cover of around $150,000 is in place for an annual premium of just $1,600.


Ends

© Scoop Media

 
 
 
World Headlines

 

APEC : Leaders Issue Kuala Lumpur Declaration

The leaders of the 21 APEC member economies issued the Kuala Lumpur Declaration following the first-ever virtual 27th APEC Economic Leaders’ Meeting chaired by Malaysian Prime Minister Muhyiddin Yassin. Convening for the first time since the ... More>>

UN: Refugee Resettlement Numbers Fall To Lowest In Two Decades

Refugee resettlement numbers will be at a “record low” this year, the UN refugee agency (UNHCR) said on Wednesday, with only 15,425 people resettled in the first nine months of 2020, compared to more than 50,000 in 2019. In 2016, resettlement ... More>>

G20: Global Co-Operation And Strong Policy Action Needed For A Sustainable Recovery

The COVID-19 crisis has exposed major weaknesses in our economies that can only be fixed through greater global co-operation and strong, targeted policy action, according to a new OECD report presented to the Leaders of the G20 countries at their ... More>>

OECD: GDP Rebounded By 9.0% In The Third Quarter Of 2020 But Remains Below Pre-Pandemic High

Following the unprecedented falls in real gross domestic product (GDP) in the first half of the year in the wake of COVID-19 containment measures, GDP in the OECD area rebounded by 9.0% in the third quarter of 2020 but it remains 4.3% below its pre-crisis ... More>>