Reducing volatility and creating certainty for decision making.

climate.insurance.org

Reducing volatility and creating certainty for decision making.

Shaping Climate Resilient DevelopmentA Framework for Decision-makersDr. David Bresch, Head Sustainability, Swiss Redavid_bresch@swissre.com


www.swissre.com/floodriskapp


http://media.swissre.com/documents/pub_climate_adaption_en.pdfhttp://media.swissre.com/documents/rethinking_shaping_climate_resilent_development_en.pdfNo need to take notes … www.swissre.com/climatechangewww.swissre.com/floodriskapp


The need for climate-resilientdevelopment“Business as usual”high-carbon growth isno longer an optionDevelopmentClimateresilientdevelopmentMitigation is aligningwith the broaderdevelopment agendaas people accept thathigh-carbon growthis unsustainableMitigationclimatecompatibledevelopmentClimate-proofedabatementAdaptationAdaptation willrequire incrementalfunds beyondbusiness as usual;adaptation anddevelopment areoften indiscernible Climate resilient development requires knowledge-building, planning and preparation, disastermanagement and risk transfer, and investments in climate-resilient infrastructure and technologydavid_bresch@swissre.com4


Objectives:• Provide decision makers with the facts and methods necessary to design and executea climate adaptation strategy• Supply insurers, financial institutions, and potential funders with the information required to unlockrisk prevention funding and deepen global risk transfer marketsWe developed and tested a methodology to:• Follow a rigorous risk management approach to assess local total climate risk, the sum of today’s climate risk, the economic development paths that might put greater population and value at risk the additional risks presented by climate change• Propose and prioritize a basket of adaptation measures to address total climate risk on an economic basisThe team:Climate-resilient development needs toassess and address total climate risk• Economics of Climate Adaptation (eca) Working Group, a partnership between the Global EnvironmentFacility, McKinsey & Company, Swiss Re, the Rockefeller Foundation, ClimateWorks Foundation, theEuropean Commission, and Standard Chartered Bank.So far, economics of climate adaptation studies have been carried out for Maharashtra, India and North and North East China: focus on drought risk to agriculture; Mopti region, Mali: focus onrisk to agriculture from climate zone shift; Georgetown, Guyana: focus on risk from flash floods; Samoa: focus on risks caused by sea level rise (storm surge and groundwater salination);Tanzania: focus on health and power risks caused by drought; Hull, UK: focus on risk from multiple hazards (wind, inland flood, storm surge); Miami and South Florida, USA: focus on risk fromhurricanes; Caribbean: Multihazard and sector studies in Anguilla, Antigua and Barbuda, Cayman Islands, Bermuda, Barbados, Jamaica, St. Lucia and in Dominica; and a sector study alongthe US Gulf Coast (Alabama, Louisiana, Mississippi, Texas). See www.swissre.com/climatechangedavid_bresch@swissre.com5


The working group studied seventeenregions with diverse climate hazardstoday, focus on:multi-hazard and-sector studies in Anguilla,Bermuda, Barbados ,Jamaica, Antigua andBarbuda, St. Lucia andDominicaUS Gulf coastMaliU.K. / HullChinaNorth, NortheastFloridaIndiaMaharashtraSamoaTanzaniaSamoaGuyana http://media.swissre.com/documents/ECA+Brochure-Final.pdf and www.swissre.com/climatechangedavid_bresch@swissre.com6


Multi-hazard and -sector studies in Anguilla,Bermuda, Barbados, Jamaica, Antigua andBarbuda, St. Lucia and Dominica


Selected countries/sectors cover 66%of regional GDP and labour workforcedavid_bresch@swissre.com8


Hazard: Tropical cyclones in the North Atlantichistoric~100 yearsprobabilistic~10‘000 yearsdavid_bresch@swissre.com


Total climate risk =Risk today + Economic growth + Climate changeplus 100%in 20 yearsBarbados case studydavid_bresch@swissre.com10


Barbados: 75% of adaptationmeasures have net economic benefitMeasures below dotted linehave net economic benefitsdavid_bresch@swissre.com11


St. Lucia: Only 16% of adaptationmeasures have net economic benefitIn USD m, 2009david_bresch@swissre.com12


Rare high severity events: insurancemore effective than further risk mitigation measuresdavid_bresch@swissre.com13


Roadmap and business case foradaptation fundingPlease find the full study at www.swissre.com/climatechangedavid_bresch@swissre.com14


Caribbean Cat Risk Insurance Facility – CCRIFThe CCRIF offers parametric hurricane andearthquake insurance policies to 16 CARICOMgovernments. The policies provide immediateliquidity to participating governments. Membergovernments choose how much coverage they needup to an aggregate limit of USD 100 millionThe mechanism will be triggered by the intensity ofthe event (e.g. winds exceeding a certain speed).The facility responded to events and made payments(USD 33 Mio to date):• Dominica & St. Lucia after earthquake (2007)• Turks & Caicos after Hurricane Ike (2008)• Haiti (2010)Swiss Re and other overseas reinsurers, programplaced by Aon Benfield Ltd. derivative placed byWorld Bank Treasury http://media.swissre.com/documents/ECA+Brochure-Final.pdf and www.swissre.com/climatechangedavid_bresch@swissre.com15


The R4 Rural Resilience InitiativeProtecting livelihoods in a changing climatein collaboration with:www.swissre.com/rethinking/crm/The_R4_Rural_Resilience_Initiative.html


Legal notice©2012 Swiss Re. All rights reserved. You are not permitted tocreate any modifications or derivatives of this presentation or touse it for commercial or other public purposes without the priorwritten permission of Swiss Re.Although all the information used was taken from reliablesources, Swiss Re does not accept any responsibility for theaccuracy or comprehensiveness of the details given. All liabilityfor the accuracy and completeness thereof or for any damageresulting from the use of the information contained in thispresentation is expressly excluded. Under no circumstancesshall Swiss Re or its Group companies be liable for any financialand/or consequential loss relating to this presentation.17

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