Supporting Loss and Damage for the Most Vulnerable: Experiences from Africa and Elsewhere
This side event, moderated by Sven Harmeling, CARE International, discussed key definitions and principles for financing loss and damage initiatives, including through climate risk insurance, and shared findings from the African Risk Capacity (ARC), a specialized agency of the African Union.
Idy Niang, Senegal, said that the challenge before the Executive Committee (ExCom) of the Warsaw International Mechanism for Loss and Damage associated with Climate Change Impacts (WIM) in its work on a clearing house for risk transfer is to develop a sound international framework to ensure that insurance companies help vulnerable populations. He noted the R4 Rural Resilience Initiative (R4) in his country, highlighting food security among its benefits.
Sabine Minninger, ACT Alliance, hoped that the upcoming Group of 20 Summit, taking place in Hamburg. Germany, from 7-8 July 2017, will take forward Germany’s InsuResilience initiative, which aims to provide climate risk insurance coverage to 400 million poor and vulnerable people by 2020. She cautioned against addressing climate change by “dealing with the symptoms,” such as loss and damage. Minninger also urged civil society to work on making climate risk insurance premiums affordable, noting that the poorest “should not pay at all.”
Vitumbiko Chinoko, CARE International, presented on the ARC, highlighting experiences from Southern Africa. Among recommendations for the ARC, he identified the need for: capacity building on, and affordability of, climate risk insurance; enhanced participation and transparency through involving non-state actors; enabling environments; using participation of the poor as a criterion for approving applications for certificates of good standing; and a participatory monitoring and evaluation process for the whole facility that should include poor women farmers.
Swenja Surminski, London School of Economics (LSE), emphasized the importance of keeping in mind the aims and objectives behind using insurance as a tool to address loss and damage. Highlighting advantages of insurance over post-disaster aid, she noted incentivizing and enhancing risk reduction through insurance, and sharing loss and damage beyond the at-risk community through solidarity funds as key challenges to designing and implementing insurance in the loss and damage context.
Reinhard Mechler, International Institute for Advanced System Analysis (IIASA), outlined the pro-poor principles of the Munich Climate Insurance Initiative (MCII), including comprehensive needs-based solutions, client value, affordability, accessibility, participation, sustainability and enabling environments. Among transformative measures for risk management, he highlighted: pooling and sharing risks in order to diversify them; innovative instruments involving public-private partnerships; livelihood transformation; and migration. Under “curative” options, he listed loss and damage mechanisms at the national level and a displacement coordination facility.
In the ensuing discussion, participants addressed, inter alia: the role of the WIM ExCom and the clearing house for risk transfer in initiatives, such as InsuResilience; innovative sources of, and accounting for, loss and damage finance; utility of indirect insurance mechanisms for the poor; links between insurance initiatives and humanitarian networks; involvement of multilateral development banks in climate insurance; and challenges associated with covering insurance premiums for the poor.
In closing, Colin McQuistan, Practical Action, said that the key objective of the event was to “keep loss and damage on the agenda,” noting that capacity building is vital.