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1 Science forLossandDamage.FindingsandPropositions 29
insuredparticipateinadisasterpoolaccordingtotheirriskclassandpayarisk-based
premium.Thus, thecommercial insuranceapproach,unlesssubsidisedorotherwise
supported,doesnot share riskbeyond theat-risk insuredcommunity.
This stands in contrast to most micro-insurance and regional insurance pools,
whichforthemostpartreceivesubstantialsupportfromtheinternationalcommunity.
Supportappearstobeincreasinglybasedontheconceptofsolidarity,consistentwith
thehumanitarianprinciplesunderlyingdevelopmentassistance,andnotonattribution
or responsibility forclimatechange impactsexperiencedbyvulnerablecountries.A
commonchallengewith the solidarityprinciple,which features subsidies andother
support to reduce premiums, is its failure to incentivise policyholders to reduce
theirrisk.Inmeetingthischallenge, internationalfinancial institutions,development
agenciesandotherdonorswillneedtoreconcilethecontendingequityandpreventive
objectives in their supportof climate insuranceprograms.
Twoexamplesof insurance instruments serving thepoor, theAfricanR4micro-
insurance programand theAfricanRiskCapacity (ARC) regional insurance pool,
combine these goals.Neither is a commercial insurance enterprise; neither is fully
characterisedbyrisk-basedpremiumsunderlyingtheprincipleofmutuality;andboth
are highly subsidised. TheR4 program’s success has largely been attributed to its
closeconnectionwithpublicsafetynetprogramsintheparticipatingcountries,while
ARCrequiresmembergovernmentstodevelopdisbursementplanstoensurethat the
most vulnerable parts of the populationbenefit from themacro scheme.Moreover,
ARC’s innovativeExtremeClimateFacility (XCF)programmayadditionallybring
in theconceptofaccountability,motivatedbyaperceivedethicalor legalobligation
for compensating those experiencingclimate-attributed losses anddamages, linked
tochangesinobservedextremeweatherintheregion(Linnerooth-Bayeretal.2018).
Ingeneral terms, insuranceisapre-arrangedcompensationmechanismfor losses
incurredandcanbeofferedbybothprivateandpublicactors.Publicrelieforcatastro-
phefundsserveasimilarfunction,whileneithercollectingpremiumsnor(typically)
estimating risks.Many countries in the world have contingency funds to support
victimsof disasters. InBangladesh, there is debate onwhether to set up a national
mechanism that would reimburse climate-related losses incurred by farmers and
households that go beyond their adaptation possibilities (for example, if flooding
pushes people to leave their homesteads or drought renders farmingnot profitable)
(Haqueet al. 2018).
In such a context, insurance in awider sense (including national compensation
pools)may innovativelybeusedas anavigational tool for exploring the adaptation
frontiers(broadlociaroundadaptationlimits).Suchexplorationmayinvolve:(i)sig-
nallingthemagnitude,location,andexposuretoclimate-relatedrisksandcaseswhere
adaptation limits are approached or breached; (ii) supporting actors tomove away
fromadaptation limits through improvedex-antedecisionmakingand incentivising
risk reduction andadaptationbycreating amore certain environment for decisions
onclimateresilientdevelopment;and(iii)enablingactorswithaccess toappropriate
riskfinancingmeasures toremaininthetolerableriskspace.Onepropositionis thus
toembedclimateinsuranceandotherrelatedinstrumentsinacomprehensiveclimate
Loss and Damage from Climate Change
Concepts, Methods and Policy Options
- Titel
- Loss and Damage from Climate Change
- Untertitel
- Concepts, Methods and Policy Options
- Autoren
- Reinhard Mechler
- Laurens M. Bouwer
- Thomas Schinko
- Swenja Surminski
- JoAnne Linnerooth-Bayer
- Verlag
- Springer Open
- Datum
- 2019
- Sprache
- englisch
- Lizenz
- CC BY 4.0
- ISBN
- 978-3-319-72026-5
- Abmessungen
- 16.0 x 24.0 cm
- Seiten
- 580
- Schlagwörter
- Environment, Climate change, Environmental law, Environmental policy, Risk management
- Kategorien
- International
- Naturwissenschaften Umwelt und Klima