Insurance Can Play a Greater Role in Climate Change Adaptation
By STEVE TUCKEY
Insurance must play a greater role in helping poor, low-lying countries adapt to global climate change, according to speakers at the opening session of Climate Week NYC activities in New York City on Monday.
Ann Hastings, chief executive officer of the Fonkoze Financial Services company, which is the largest micro-financing agency in Haiti, spoke of one woman determined to lift herself out of poverty with a number of businesses, only to find herself struck down by hurricanes in 2004 and 2008, and the earthquake in 2010,
"I just can't keep going on just building assets every day. I must think of a way of protecting them," Hastings told the group.
With the backing of Swiss Re, Hastings formed an insurance company that after the earthquake was able to pay out about $125 to some of her poorest entrepreneurs so that they did not have to start from scratch after every disaster. In addition, she was able to get their debts forgiven.
"Our clients felt it was like salvation," she said.
Amy Davidsen, U.S. executive director of The Climate Group, said 20 years ago at the Rio Earth Summit, most of the efforts focused on mitigating the impact of global climate change through measures to reduce greenhouse emissions.
"Adaption was almost a dirty word," she said. "It was like we were giving up."
That is no longer the case as adaptation efforts such as the Fonkoze insurance initiative will help mitigation efforts, which are becoming more critical as estimates are now that average global temperatures will rise 4 degrees centigrade by 2050 instead of the previously estimated 2 degrees.
"If Uganda can't produce coffee with a 2-degree rise in temperatures, what is going to happen when they go up twice that much," said Andrew Steer, special envoy for climate change for the World Bank.
John Morton, vice president for investment policy at the U.S. Overseas Private Investment Corporation, said the investments in his federal group are increasingly geared to renewable energy projects, which will help aid mitigation efforts.
He does not see projects aimed at adaptation gaining support for several years because they are more locally based without solid business plans so far.
Adaptation initiatives must also take place in the more developed world, said Elizabeth Belenchia, especially when it comes to coping with the increased urbanization likely to result in this decade.
By 2020 there are expected to be 20 metropolitan areas with populations of 20 million or more, she said.
As head of the International Organizations Committee for the International Real Estate Federation, Belenchia and her group reach out to developers to include green solutions in their building plans.
Even though they may increase capital costs in the short run, they will decrease operating costs over the long term, she said.
"While increased urbanization does help reduce energy costs in a number of ways, we have to start to find ways to provide things such as heating, air conditioning and water delivery in more efficient ways so we don't lose all those gains," she said.
Climate Week NYC, an annual summit boasting high-level meetings between the world's leading businesses and governments, is being held from Sept. 19 to 26, ahead of the United Nations' climate summit in Durban, South Africa, in December.
September 26, 2011
Copyright 2011© LRP Publications