Washington, D.C. — The confluence of recent agreements between the United States and China to provide billions in climate finance for developing countries and the upcoming climate negotiations in Paris this December represents a unique opportunity to promote clean, sustainable economic development and to enhance climate resilience in developing countries. Efficient and effective insurance options to aid in responding to and rebuilding from extreme weather caused by climate change are an important tool for the United States and China to consider as the issue is taken up later this year.
The Center for American Progress released a column today showing why efforts to advance U.S.-China climate cooperation should include climate-related parametric risk insurance to protect vulnerable countries from devastating cost of climate change.
“As the United States and China see eye to eye and wallet to wallet on providing climate finance options for developing countries in the run up to the Paris climate talks, we have a real opportunity to provide assistance to climate vulnerable countries and promote sustainable climate policies,” said Pete Ogden, Senior Fellow at CAP and co-author of the column. “Parametric insurance is an efficient and effective way to provide resources to vulnerable countries when they need them, allowing them the ability to respond to and mitigate the effects of extreme weather on their populations and infrastructure and giving them a hand in rebuilding.”
As CAP outlined in a recent issue brief, parametric risk insurance uses environmental metrics such as wind speed, rainfall levels, or drought conditions rather than assessments after a disaster to trigger insurance payments. This allows vulnerable countries to have the financial means to quickly respond to crises and rebuild. Parametric insurance has been well tested among countries prone to extreme weather and has been successfully utilized within the Chinese agriculture sector.
Click here to read the column.
For more information on this topic or to speak with an expert, contact Tom Caiazza at email@example.com or 202.481.7141.