Seite - 503 - in Loss and Damage from Climate Change - Concepts, Methods and Policy Options

21 InsuranceasaResponse toLossandDamage? 503 there are elements ofmutuality in setting country-specific trigger points and caps, whichlargelydeterminepremiums,andalsoelementsofsolidaritygivensubstantial donor support. ThePCRAFI, incontrast,basespremiumslargelyonability-to-payofitsmember countriesratherthanacalculatedrisk.Thismeanstherearesubstantialcrosssubsidies across member states. In addition, multiple development partners and IDA credit have contributed to the establishment of the pool as well as to premium support. ThePCRAFI is thusbasedprimarily on theprinciple of solidarity in termsof both outside- and inside-pool support. Interestinglytheprincipleofaccountabilityhasnotbeeninvokedinjustifyingthe contributionsof thedonorcommunity to thesesystems,eventhoughclimatechange is a concern to all regional pools. However, not surprising after the devastating 2017HurricanesHarveyandIrma, theattributionof thecoveredhazards toclimatic change is under investigation forCCRIF and the other pools.More specifically, as aninnovativeproposition,ARCissettingupanExtremeClimateFacility(XCF)that wouldbecapitalisedbytheinternationalcommunityif trendsinextremeweatherare foundattributabletoclimatechange(Wilcox2014).Thus,theXCFcanbeconsidered amanifestationofclimatechange risk, although there isnodirectdiscussionof this facilityextractingpaymentsbasedongreenhouseemissionsfromwealthycountries, and thusnodirect appeal to theaccountabilityprinciple. Box21.3TheExtremeClimateFacility(XCF)oftheAfricanRiskCapacity(ARC) Function Additionalfinancingforcountriesalreadymanagingtheircurrentweatherrisksthrough ARC. Data-drivenmodusoperandi Payments to countrieswill be entirely data-driven over a 30 year period—if there is no significant increase inextremeeventsover current climatology, thennopayment is made. ClimateAdaptation Countriesmust use payments to invest inDRRor climate change adaptionmeasures specified inpre-definedcountry level adaptation funds. Scale Paymentsizewouldincreasewithextremeeventnumberandmagnitudeoverandabove apre-specifiedthreshold,correspondingtothedegreeofconfidencethatextremeevents are increasingdue toclimatechange. Action focus LeveragingARC’sexistinginfrastructure,XCFwillensurethatcountriesandtheinter- national community properlymonitor climate shocks and are financially prepared to undertakegreater adaptationmeasures should their frequencyand intensity increase. SourceWilcox (2014)