Washington, D.C. — While the Paris Agreement marked a historic turning point in global efforts to combat climate change, the United States must nevertheless continue to ramp up efforts to help the world’s most vulnerable people and countries cope with the near-term increase in climate-change-fueled extreme weather events that are already too late to avert.
One tool that countries can use to help better manage and cope with these effects is climate-related risk insurance—yet such insurance is far too scarce across the developing world. The Center for American Progress has released an issue brief that examines the need for better risk modeling and calls on the United States to lead a global effort to expand and improve such modeling in developing countries.
“The Obama administration—in partnership with the private sector, other countries, and international development banks—has made important initial investments in expanding climate-related risk insurance,” said Pete Ogden, CAP Senior Fellow and co-author of the issue brief. “But to make these tools widely available to hundreds of millions of people in the most vulnerable countries will require further effort. One critical step is ensuring that the high-quality risk modeling on which the insurance depends is carried out quickly.”
Of the total economic losses endured last year from natural disasters, insurance covered only 30 percent—and the vast majority of uninsured losses occurred in developing countries. In Asia, only 8 percent of losses from natural disasters were insured in 2015, and in Africa, only 1 percent of such losses were insured. The United States has the opportunity to help address this shortfall and move the world toward meeting the G7 goal of expanding access to climate-related risk insurance to 400 million additional people by working to ensure the proper risk models are developed immediately.
Click here to read the paper.
For more information on this topic or to speak with an expert, contact Tom Caiazza at [email protected] or 202.481.7141.