Page - 318 - in Loss and Damage from Climate Change - Concepts, Methods and Policy Options

318 L.Schäfer et al. Chaps.16,17,and19of theIPCC5thAssessmentreport (Kleinetal.2014;Chamb- wera et al. 2014; Oppenheimer et al. 2014) point towards limits in the ability of systemstoadapt toclimatestressors(Dowetal.2013a,b;Warneretal.2013;Adger et al. 2009). There is evidence that poor and vulnerable people and communities already exist and persist at the edges of these boundaries and limits (Islam et al. 2014;Warner et al. 2015;Monnereau andAbraham 2013). They find themselves operating within an adaptation frontier, a “socio-ecological system’s transitional adaptive operating space between safe and unsafe domains” (Preston et al. 2014). To successfully navigate adaptation frontiers, these people and communities need tools that allow them to explore the frontier, stay away fromadaptation limits and continuouslymove into saferdomains. Asthedebatearoundadaptationconstraints, limits,andpossibleassociatedlosses and damages unfolds, insurance has been promoted as a tool that can help buffer against thedisruptive effects of climatevariability andclimate change (see chapter by Linnerooth-Bayer et al. 2018 in this book; Surminski et al. 2016). Insurance has been a cornerstone in climate impact related discourses of theUnitedNations FrameworkConvention onClimate Change (UNFCCC) from its establishment in 1992.Several substantivepolicyproposalswerebrought forward resulting in insur- ance being featured in relevant adaptation andLoss andDamage related decisions and frameworks (comparechaptersbyMechler et al. 2018;Linnerooth-Bayer et al. 2018;Schinkoet al. 2018 in this book). Insurance is nowanchored inmajorpolicy arenas asone tool to address the riskof climate change, including theParisAgree- mentandtheSendaiFrameworkforDisasterRiskReduction.Additionally, thetopic experienced aboost through theG7’s decision to set up a “ClimateRisk Insurance Initiative” (InsuResilience) during their 2015 summit in Elmau and the 2017G20 summitacknowledginga“GlobalPartnershipforClimateandDisasterRiskFinance and InsuranceSolution” (G72015;G202017). Drawing on research undertaken in the context of theG7 InsuResilience Initia- tive to assess the potential of insurance to improve riskmanagement for poor and vulnerable communities (Schäfer et al. 2016), this chapter aims to inform theLoss andDamagedebatebyanalysingthedegreetowhichinsurancecanbeusedasatool toexploreandmanageadaptation frontiers. Inafirst step,weoutline thechallenges relatedtodecisionmakingunderclimateriskandintroducetheconceptofadaptation frontiers. In a second step,weanalyse howdecisionmakers canuse insurance in a waytoaddress thesechallengesandmanageadaptationfrontiers. Ina thirdstep,we discusslimitsofinsuranceasaclimateriskmanagementtoolanddescribeprinciples that enable insurance tools to helpmovepoor andvulnerable people and countries away fromadaptation limits intoa safer, tolerable risk space. The chapter concludes that insurance can be used as a navigational tool around adaptationfrontiers in threeways:First,byfacilitating theexplorationofadaptation frontiersbycontributing toa framework for signalling themagnitude, location, and