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Newsletter November 2016
What Climate Do We Want to Live In?

Climate change, complexity, and new solutions

The new Sustainable Development Goals (SDGs) are an evolutionary step forward in addressing development challenges for several reasons. Chief among these are the anchoring of the SDGs in the human rights framework, and the explicit recognition that all of the different development facets, represented by different goals and targets, are fundamentally inter-dependent (A/Res/71 para. 13).

Solutions must therefore be similarly evolved. In the post-Cold War world, with its multi-polar proliferation of actors, widespread globalization, and technological empowerment, new solutions must demonstrate an understanding of inter-relatedness, of complexity. Old analytical approaches ill equip us to discern the forces that now shape decision-making, as perhaps demonstrated by Brexit, the U.S. election, and the so-called ISIS.

In the face of complexity, where everything impacts on everything, we can either simplify the facts, match the complexity with greater complexity in ourselves (organizationally), or apply systems approaches. At GVI, we believe that understanding the dynamics underpinning all the parts that make up a system, and working with those dynamics, is likely the most effective approach to problem-solving. Systems frameworks, modeling, and design are among the new tools we must now master to unpack complexity.

In this newsletter we explore what some of these SDG cross-linkages are, through the particular lens of climate change as COP22 unfolds. At the crossroads between climate and poverty, and climate and the right to water, we hear expert proposals for climate insurance, as well as for water policy. Our blog also brings updates on the issues, activities and deliberations at COP22.

How do we ensure that our solutions match our reality?

Alisa Clarke
President, Global Vision Institute

Control the Unavoidable

The neo-conservative Tea Party and new President-elect Donald Trump regard climate change as a myth. However, well-established scientific evidence proves them wrong. The consequences of the changing climate are unpredictable; millions of people will certainly be displaced. Climate action is expensive but there is no alternative.

“Climate change is happening even faster than the predictions would have told us five years ago or ten years ago.“ President Obama stated at the SXSL Discussion in the White House this October. Climate change is the major challenge of our time. More than 95 percent of climate scientists agree that climate change is the result of human activity. American Association for the Advancement of Science (AAAS), the globally biggest knowledge society, rang the alarm bells in its 2014 study and warned against unrestricted greenhouse-emissions. “A given amount of emissions will lead to a given amount of temperature increase that will lead to a given amount of smooth incremental sea level rise“, and the report concludes that “pushing global temperatures past certain thresholds could trigger abrupt, unpredictable and potentially irreversible changes that have massively disruptive and large-scale impacts“. The Intergovernmental Panel on Climate Change (IPCC) which serves as reference in the negotiations taking place within the United Nations Framework Convention on Climate Change (UNFCCC) assumes a highly-probable forecast traced to an increased amount of carbon dioxide particles in the atmosphere in its assessment from 2007: tropical storms and hurricanes will intensify, heavy rainfalls and floods are becoming an ever more frequent occurrence, rising temperatures will lead to droughts and crop failures, sea-level rise will be due to rainfalls and melting glaciers.

“Freshwater availability in Central South, East and Southeast Asia particularly in large river basins is projected to decrease due to climate change which, along with population growth and increasing demand arising from higher standards of living, could aversely affect more than a billion people by the 2050s“, the IPCC-scientists write in their 2007 report. The global population has tripled since 1950, about 3,3 billion people suffer from freshwater scarcity, one billion of them is forced to consume polluted water. Persistent droughts and further rising sea-levels will worsen the already existing problem in the near future. (More on water scarcity here.)

Back in 2006, the 700 pages Stern Review on the Economics of Climate Change, authored by the London macroeconomist Nicholas Stern, and published for the British government, attracted attention beyond the academic world. His study examined the economic implications of climate change and the closely related consequences for modern societies. Preventing the excess of 550 parts per million, carbon dioxide particles in the atmosphere, costs about one percent of the world's GDP, Stern calculated. The global economy will have to bear the ultimate costs of reducing CO2 emissions. That can be one explanation why there has not been much of political will shown in protecting vulnerable communities.

Migration patterns and sources of displacement have changed. Many experts argue that the migrant/refugee dichotomy disregards the very complex reasons of people who have to flee but are not considered as refugees according to the 1951 Geneva Convention Relating to the Status of Refugees. The deterioration of the environment and the impacts of climate change will trigger large population movements. As the IPCC illustrated in its first report in 1990, “the gravest effects of climate change may be those on human migration“. According to figures of the International Organization of Migration (IOM), an overall of approximately 1,6 billion people have been affected by droughts over the last 30 years; hurricanes, cyclones and other types of storms made a severe impact on 718 million people during the same period. The United Nations estimate that about 350 Million people can be displaced due to the adverse effects of climate change. In international refugee law, however, destructive environmental conditions are not sufficient to claim protection. Stern declared that “the exact number who will actually be displaced or forced to migrate will depend on the level of investment, planning and resources“. Contracting parties of the 2015 Paris Agreement recognize "that climate change represents an urgent and potentially irreversible threat to human societies". However, necessary measures remain to be addressed.

The article on 'Loss & Damage' in the PA suggests solutions in supporting people affected by environmental disasters. In paragraph 50 signatory states of the PA call on the Executive Committee of the Warsaw Interantional Mechanism to establish a Task Force “to develop recommendations for integrated approaches to avert, minimize and address displacement related to the adverse impacts of climate change“. Sea-level rise and groundwater salinization which have already damaged common agricultural land on islands and coastal regions prevail the central inescapable causes of action to be claimed in a long-term perspective. The most affected countries are the least responsible. The article will be characterized by the hostility of industrialised countries to pay for compensations. For comparison: measured in absolute numbers, China is the biggest polluter with 9.019,518 kilotons (kt) followed by the United States (5.305,570 kt) and India (2.074,345 kt). Bangladesh, a country expected to be hit hard by climate change impacts, emitted only 57,069 kt CO2 in 201, World Bank data displays.

“The goal is to avoid the uncontrollable and control the unavoidable“, said Hans-Joachim Schellnhuber, the director of the Potsdam Institute for Climate Impact Research, in a statement to the German weekly “Der Spiegel“ ten years ago. The 2030 agenda of the international community and the Paris Agreement which are the blueprint of political policy on a world stage will require action from every single country and its citizens, from the private sector, non-profit organizations and the academia. Author Naomi Klein summarizes as she pleads for an “act on climate“ in her book 'This Changes Everything': “The longer we wait, the more it builds up, the more dramatically we must change to reduce the risks of catastrophic warming“.

Thilo Kuehne
Global Vision Institute

UN climate talks in Marrakech: Will the spirits from Paris prevail?

Who would have expected this: Just days before the opening of this year’s UN climate change conference COP22 in Marrakech (7-18 November 2016) the Paris Agreement entered into force, not even a year after its adoption in the French capital end of 2015. The pace by which this happened certainly sets a new record, especially given the difficult and protracted negotiations over the past ten or so years (that failed so dramatically in Copenhagen back in 2009).

Now it almost appears as if governments are trying to compensate for the snail‘s pace of the past. Last time I looked, a hundred-and-nine countries have ratified the Paris Agreement by now; far beyond the threshold set for it to become live, of at least 55 countries that represent at least 55 per cent of global emissions.

The Paris Agreement: A milestone in international climate diplomacy

The Paris Agreement clearly is a milestone in international climate diplomacy. What has been merely a political goal has now become a binding goal under international law: To limit global warming well below 2°C above pre-industrial levels. The treaty even goes further and aims at pursuing efforts to limit warming to no more than 1.5°C. To achieve that goal, the agreement commits countries to cut emissions quickly enough to achieve net zero in the second half of a century, i.e. a balance between anthropogenic emissions and sinks (such as growing forests, but also questionable technologies such as sequestering carbon dioxide deeply underground). Every country has to submit new (and increasingly ambitious) plans and targets to cut emissions every five years, called Nationally Determined Contributions. The treaty also commits signatories to strengthen global capacity to adapt to a changing climate and to regularly prepare national adaptation strategies. And, as this is a landmark achievement given the resistance by developed countries in the past, addressing unavoidable losses and damages due to climate change got its own stand-alone article in the Paris Agreement. The treaty confirms the financial obligations developed countries have under the UN Framework Convention on Climate Change, to assist developing countries in the battle against climate change. Finally, progress in implementing the agreement will be reviewed every five years in what it calls a Global Stocktake.

The early entry-into-force of the Paris Agreement has received quite some attention during the first week of COP22 that will now also see the first formal gathering of signatories to the Paris Agreement. We can assume that many governments will use this opportunity to celebrate and to build on the positive overall mood since Paris, to assure one another that the world is now taking climate change seriously, and to also point to developments since Paris in other fora, such as the first steps of the African Renewables Energy Initiative, to which rich countries have pledged $10 billion (including €3 billion from Germany), the recent success under the Montreal Protocol to further cut ozone-depleting gases with high warming potentials, or the (weak) decisions taken on international aviation under the International Civic Aviation Organisation (ICAO).

They need that optimism: Donald Trump has won the presidential elections in the US. Long before he had already announced that he would have the US leave the Paris Agreement, and already during the election campaign he has been outright hostile towards climate action. We will have to see what will happen once he takes office; but it’s plain to see that there are challenging times ahead for the collaborative spirit that brought the world together to agree and then ratify the Paris Agreement. It is somewhat comforting that his views are quite at odds with what the people of the United States believe – a majority of the US public considers it a high priority to cut emissions, and the reality of climate change and its soaring economic damages are becoming increasingly obvious in the US.

Main task of COP22: The Paris Agreement’s rulebook

Nonetheless, government delegations at the Marrakech conference are focusing on the implementation of the Paris Agreement. The main task of COP22 is the work on the treaty’s rulebook and to give life to its often somewhat vague articles. For instance, formalities around the Global Stocktake on overall implementation of the agreement and progress in achieving its objectives need to be worked out in detail, including what to do with the outcomes of these 5-yearly checks (except to file a heavy report). Delegations also have to sort out in what format, using what metrics and with what additional information countries have to present their national climate plans every five years. One key motivation is of course to ensure countries stay engaged, another one is to make their contributions comparable – which is complicated by the fact that the climate plans and the scope and the nature of targets contained in such plans remains in the hands of each country. For instance, while developed countries are committed to submit economy-wide reduction targets for greenhouse gas emissions (with the EU for instance having put forward a target to cut its domestic emissions by at least 40 per cent by 2030 compared to 1990), the emerging economies have the flexibility to formulate efficiency targets, emission cuts against business-as-usual or plans to expand renewable energies. Another area of work is the transparency regime of the Paris Agreement, to track progress of countries in implementing their commitments, including on the provision of financial support to developing countries.

COP22 will not close the dangerous ambition gap

As important a rulebook as the Paris Agreement will be, at the end of the day its value lies in how much ambition countries demonstrate to achieve its goals, and the outlook is pretty dire. The first round of countries’ plans is so weak that according to the United Nations Environment Programme the resulting emissions pathways point to warming of up to 3.4°C, way past the adopted limits of no more than well below 2°C, aiming for below 1.5°C. What is particularly alarming that this is not news to anyone, even the outcome documents from last year’s summit in Paris expressed concern about the situation. Action so far: none. It’s not even on the agenda for discussion at COP22. Governments seem to be hoping that the gap between agreed objectives and the overall ambition shown in countries’ plans will be bridged in later iterations of countries’ national climate plans. However, this is likely to prove impossible. Current emission reduction targets are so weak that overall emission budgets to stay on (or return to) pathways consistent with keeping warming below agreed limits will be blown in a few years’ time. In short: if current climate targets are not adjusted very soon, the Paris Agreement will become meaningless.

Apparently it does not help that poor and vulnerable countries do not complain about the lack of ambition until the big powers start to move, and there are no signs that this will change anytime soon. Europe is a good example here: At every climate conference, the European Union calls for increased ambition but does not see this call apply to itself, despite that its weak target, given the EU’s responsibility in causing climate change and its economic capabilities cannot be described as a fair contribution to the globally needed mitigation effort. Instead, the EU is currently well underway to water down its target even further, through lenient rules and by adding industry-friendly loopholes to its various instruments such as the emission trading scheme. The proposals by the European Commission to implement the 40 per cent reduction target lead to no more than 35 per cent in actual reductions, as our colleagues from WWF have calculated recently.

Apparently it does not help that poor and vulnerable countries do not complain about the lack of ambition until the big powers start to move, and there are no signs that this will change anytime soon. Europe is a good example here: At every climate conference, the European Union calls for increased ambition but does not see this call apply to itself, despite that its weak target, given the EU’s responsibility in causing climate change and its economic capabilities cannot be described as a fair contribution to the globally needed mitigation effort. Instead, the EU is currently well underway to water down its target even further, through lenient rules and by adding industry-friendly loopholes to its various instruments such as the emission trading scheme. The proposals by the European Commission to implement the 40 per cent reduction target lead to no more than 35 per cent in actual reductions, as our colleagues from WWF have calculated recently.

Loss and damage now firmly established as a third pillar?

Loss and damage as a result of climate change has always been a somewhat difficult agenda item at the UN climate talks – mostly because developed countries feared that accepting the issue would open the door to compensation claims by impacted countries, when damages as a result from extreme storms spiral out of control or loss of territory due to seal-level rise becomes a harsh reality for small island states and coastal regions e.g. in countries like Bangladesh. The Warsaw International Mechanism on Loss and Damage, an institution to deal with the issue had already been established in 2013, and the Paris Agreement covers the issue in a dedicated article. COP22 is now expected to agree on the future work plan for the WIM. This will show if the mechanism will continue mainly as a working group and talk shop or, over time, set the path towards becoming, at some point in the future, an institution that people or countries suffering losses and damages can turn to. In any case, developed countries have now somewhat accepted that the issue will not go away and are now contributing to the work constructively – as long as it is about reducing losses and damages (for instance through successful adaptation and risk minimisation) or setting up climate risk insurance schemes. The latter got a big boost after last year’s G7 summit, where G7 countries launched their climate risk insurance initiative to setting up new or enhance existing insurance schemes. Such approaches can make a lot of sense to soften the blow when disasters strike, or to compensate impacted people for losses. 

Financial support for adaptation remains unfinished business from Paris

For years, developed countries refused to clarify how they intend to fulfill the promise they made in 2009 at the infamous Copenhagen climate summit, to ramp up financial assistance to poor countries to $100 billion a year by 2020, in order to support low-carbon development and adaptation to the changing climate. Just in time for COP22, developed countries have now presented their roadmap to meet the promise, projecting overall public finance to reach around $67 billion a year by 2020, and hoping to mobilise private investments to cover the remaining gap.

Developed countries off the hook? Not quite. To be sure, developed countries see themselves on a good path to meet their promise, which is no surprise, as they are applying a methodology to account for climate finance that is at least partially designed to make reported figures and projections to 2020 appear favourable, as we have analysed in a recent report. For instance, loans are accounted for at face-value, even though they will have to be repaid. Also there are many cases where the climate-relevance of projects listed as delivering climate finance is grossly overrated, especially where climate action is only one of many objectives. With such a methodology, it’s way easier to reach the promised $100 billion a year.

A key problem of climate finance remains with us: Assistance in efforts to adapt to a changing climate, for instance to protect harvests against drought, to secure water supply in regions that are getting drier or to enhance resilience of local communities faced with increasing occurrence of extreme weather events, remains inadequate. The roadmap projects a doubling of adaptation support by 2020, but given the presently low levels this would mean that only a fifth of the promised $100-billion-a-year will be targeting adaptation. This imbalance has been an area of concern for years.

Obviously, rich countries expect some form of recognition of their roadmap at COP22. What form this could take, will also depend on what further action on climate finance they are ready to accept. Perhaps the Moroccan host can help – adaptation is one of their priorities, and the Moroccans are hoping for concrete results in this area, not least because Africa is particularly vulnerable to the impacts of climate change.

Germany: Mixed performance

Until the very last moment, it remained unclear if German environment minister Barbara Hendricks would be able to travel to the Marrakech conference with a long-term climate strategy in her luggage – and to signal to the rest of the World: Germany is ready to implement the Paris Agreement for real. Over the past months the plan has been weakened and watered down by her colleagues, especially German economy minister Sigmar Gabriel who deleted a dirty coal exit path from the plan, transport minister Alexander Dobrindt who protected the car industry from meaningful action, and agriculture minister Christian Schmidt who (no kidding) lamented that ambitious climate action in the farming sector would threaten food security in Germany. After a last minute veto by the economy minister to weaken it even further, the plan was finally adopted. It aims at making Germany largely carbon neutral by 2050, but fails to adjust greenhouse gas reduction targets to achieve that ambition and in particular is missing a coal exit path.

What’s more, Germany is set to miss its short-term reduction target of 40 per cent reductions by 2020 (from 1990 levels). A plan of action has been adopted to deal with it a while ago, but again, the weathered diehard blockers of climate action in Angela Merkel’s cabinet have ensured the plan lacks teeth, followed by new legislation to slow-down the expansion of renewable energies. An embarrassing performance indeed.

On climate finance, the German delegation travelled to COP22 with more positive news. Last year, German chancellor Angela Merkel had pledged to double German climate finance by 2020 (putting other donor countries under heavy pressure). This pledge is remarkable – even if the government is planning yet more accounting tricks to meet it, and the planned growth on climate finance in the 2017 budget will not suffice as a first step to implement the pledge.

Marrakech will move us forward

While COP22 was never set up as a moment for revolutionary outcomes, it does bear significance in moving the World forward, even if in many cases (such as on the Paris Agreement’s rulebook) final decisions will be adopted only in 2018. But it’s to some extent the nuts and bolts of the treaty that will define its effectiveness in driving change around the world – not replacing the need for political will to make it happen, to be sure, but complementing it. Some optimistic outlook on COP22 is in order.

Jan Kowalzig
Advisor on Climate Change and Climate Policy, Oxfam Germany

The Fate of Climate Refugees

The fates of millions of migrants and refugees living in vulnerable situations proves that migration and displacement are among the most extreme consequences of climate change that occur when its adverse impacts make living environments uninhabitable and force people to leave. Sea level rise and high tide on low lying island atolls, for instance, are detrimental to living conditions as they threaten peoples’ rights to food, the right to water as well as property and land.

Climate induced migration can be an adaptation strategy as well as a record for unavoidable losses and damages. Whilst it is of utmost importance to prevent forced displacement, it is mandatory that migration is facilitated and supported legally and practically. Faced with deteriorating living conditions people obviously might chose to migrate as a possibility to seek alternative opportunities. Migration within or across borders can become an acceptable adaptation measure if it is managed properly and offers new livelihood opportunities.

Looking even at the least severe IPCC scenario, the international community needs to find rights-based measures to assist communities to move to safer areas before catastrophes actually occur. At the same time it is clear that even relocation schemes that are human centered and rights oriented, inclusive and participatory can only be considered as a last resort. Not only because there are hardly any relocation projects that can be considered of sustainable benefit for the people affected, but also because the majority of people have no wish to leave their homes.

The Paris Agreement includes important elements to advance on these issues of migration and displacement in the context of climate change. In the Preamble, special reference is made to migrants as particular groups of concern, hence acknowledging their vulnerabilities and needs. Various additional considerations are given throughout the PA, which oblige parties to prevent and address the causes of forced displacement, notably the resilience of communities and the importance of livelihoods. Most importantly, the PA requests the Executive Committee of the Warsaw International Mechanism (WIM) that deals with how to address, minimize, and avert losses and damages due to climate change, to establish a task force on displacement. This task force is foreseen to develop recommendations for the COP. The terms of references are already drafted and it’s not unlikely that they’ll be adopted in the second week of COP22. The International Organization for Migration as well as the United Nations Office of the High Commissioner for Refugees and other UN Organizations as well as civil society representatives at COP stress the need for the negotiators to allocate the appropriate resources to the WIM so that the Task Force can comply with its agenda.

In various side events during COP 22, development organizations and humanitarian actors have emphasized climate change induced migration. The Platform on Disaster Displacement, successor to the Nansen Initiative on cross border disaster displacement, offers state parties tools and guidance, informed by lessons learnt, on how to improve protection for those who are forced to leave their homes due to climate change.

Here and in the WIM it is not about reinventing the wheel but rather to find synergies and coherent policy approaches. Yet, much remains to be done as countries are not obliged by the Paris Agreement to close the legal gaps for climate induced migrants.

Sophia Wirsching
Advisor Migration, Brot für die Welt

SDG6 and COP22 – Realising the human right to water and sanitation in a changing climate

The United Nations General Assembly (UNGA) officially acknowledged the human right to water and sanitation in
resolution 64/292 adopted on 28 July 2010.

The UNGA recognised the human right to water and sanitation as a right that is essential for the full enjoyment of life and all human rights (such as the human right to health).

In the 2030 Agenda, building on the achievements of the MDGs, SDG6 focuses on “Ensuring availability and sustainable management of water and sanitation for all”. SDG6 will have to be implemented universally by all countries and it is interlinked with the other 16 SDGs so that the achievement of one goal contributes to the attainment of the others. This will certainly contribute to realise the human right to water and sanitation worldwide.

Indeed the legal content of the human right to water and sanitation embraces complementary aspects: to realise this right, water and sanitation must be available, accessible, affordable, acceptable, and safe1.

In the context of the COP22 the availability dimension of the human right to water is particularly relevant and should be stressed. Water crisis are considered to be among the top three most impactful risks at a global level: we witness worldwide the increasing frequency and intensity of droughts, floods and storms due to climate change.

In order to ensure water services’ resilience to climate change, EurEau held a reflection in the framework of the COP22 and came up with recommendations for the water sector and for policy makers.

Climate change mitigation and adaptation considerations should be mainstreamed into water policy taking the opportunity of the momentum created by the review of EU water legislation in the upcoming years.

Climate change mitigation and adaptation considerations should be mainstreamed into water policy taking the opportunity of the momentum created by the review of EU water legislation in the upcoming years.

Water resources protection, the implementation of the polluter-pays principle and water availability should be a priority if we want to realise the human right to water in Europe. In case of conflicts for water allocation between different uses, drinking water production should have priority over other uses. 

This will allow water services to continue to carry out the important tasks of providing high quality drinking water to European citizens, protecting public health and the environment while fostering a sustainable economy.

Carla Chiaretti
Head of Policy, EurEau

Global Visionaries Call For Bloggers

Do you have opinions and experience to share on current international events, how they relate to universal values, and what behaviors, relationships, processes and policies will bring solutions?
Then we want to host you as a blogger on the website of Global Vision Institute, with a reach of over 3,000 international actors across our social media and communications platforms. Simply reply to me as the discussion group moderator or drop a line to

Climate insurance – An opportunity for developing countries

Low-income countries are particularly vulnerable to natural catastrophes, as few of their inhabitants can afford insurance protection. Insurance solutions such as those adopted at the 2015 climate summit in Paris can help to cushion the material impacts of climate change and provide a building block for sustainable economic growth. They make it possible to help developing and emerging countries adapt to climate change. The private sector and national governments need to cooperate in this area.

The Paris Agreement contains long-term agreements not only on climate protection but also on adapting to the now unavoidable consequences (of loss) from climate change. The Agreement officially entered into force on 4 November 2016, after the threshold for ratifications by UNFCCC member states was achieved at the beginning of October. Now we need to breathe life into it. We need specific emission-reducing measures to ensure that global warming can indeed be limited to under two degrees.

But implementing the Paris Agreement will not be easy, either for individuals or for industry. Implementation will require a sea change in behaviour (to reduce emissions) and may well threaten many jobs in established industries (such as coal, oil and gas). What's more, we need to significantly increase funding for research into low-carbon technologies.

Even if the global community follows the path of decarbonisation (abandoning fossil fuels), the risks from weather-related natural hazards will, in all probability, continue to increase. This is because CO2 has a mean residence time in the atmosphere of approximately 100 years and contributes to global warming throughout this period. The frequency and intensity of severe weather events – torrential rainfall and heatwaves in particular – have already increased in many regions over the past few decades.

Developing countries most at risk

Low-income countries are particularly vulnerable. More poor than rich lives are lost, both in absolute terms and as a percentage of population. Moreover, material losses that cannot be repaired or replaced because of insufficient funds lead to a lasting loss of prosperity.

According to loss data from Munich Re's NatCatSERVICE, approximately 861,000 people lost their lives between 1980 and 2015 as a result of weather-related natural catastrophes worldwide. Of these, 61% (522,000) lived on less than US$ 3 per day (income groups in accordance with the World Bank definition), and therefore counted among the world's poorest people. As a proportion of the world population, however, this group represented only around 12% in 2015. If you consider the next-highest income group (daily income of up to approx. US$ 11), the rate drops considerably but still shows a disproportionately high mortality rate from weather catastrophes among low-income sections of the population. In our assessment, the reasons for this are clear. Poor access to risk information and early-warning systems, and insufficient financial resources needed to protect oneself from natural catastrophes with structural measures, for example, drive up the number of victims.

Adaptation options vary depending on the region and hazards involved, but there are two main categories:

  • Ex-ante preventive measures taken ahead of a catastrophe in order to mitigate losses. These include early-warning systems, but also structural precautions and land-use regulations.

  • Ex-post measures to deal with the consequences of loss, including humanitarian aid and financing schemes. These help to overcome the economic impact of a disaster and pave the way for repair and reconstruction efforts, thereby developing resilience.

Climate insurance – A crucial adaptation instrument

For the first time ever, the final document of a UN Climate Conference of the Parties (COP) mentions insurance solutions as a way to facilitate adaptation to climate change. At the G7 summit in Elmau in June 2015, the member states agreed to launch a climate insurance initiative (InsuResilience), highlighting the importance of financial risk transfer concepts, particularly for emerging and developing countries.

The objective of InsuResilience is to give an additional 400 million people in emerging and developing countries access to insurance by the year 2020 to protect themselves against weather-related catastrophes. This will either be organised on a macro level with insurance cover for entire countries (indirect insurance of the population), or on a micro level with insurance policies for individual persons (direct insurance of the population).

Claims payments are linked to clearly defined weather parameters such as levels of rainfall or wind speed. Such products are known as parametric or trigger-based covers. In this way, people can insure themselves against drought, windstorm or heavy rainfall, each of which is recorded using objective measurement methods. This mechanism makes terms and conditions transparent, reduces the administrative cost of calculating claims amounts, and thus enables payouts to be made promptly. It should be remembered, however, that besides the above-mentioned advantages of parametric triggers, there is also a basis risk to be taken into account (occurrence of a loss before the defined trigger level has been reached). However, the simplicity of the payout principle on a parametric basis means that micro and macro solutions already exist in a number of developing countries and, in line with the G7 declaration, should be further built upon.

If structured well, insurance solutions not only create incentives to take preventive measures (by way of knowledge transfer and/or deductibles), but also represent an effective tool to finance claims burdens. If the public and private sectors are to overcome the immense financial impact of such disasters, it is imperative to soften their long-term impact on the economy. To this end, the introduction of climate insurance solutions promotes the construction of robust social and economic structures, thereby developing resilience.

Public-private partnerships are required

If the G7 target is to be attained, the affected countries will have to adopt the necessary regulatory measures and participate financially in the project. The additional provision of international aid or ramp-up support from climate funds, such as the Green Climate Fund (GCF), also constitutes a promising solution.

This is the only way to develop lasting (i.e. sustainably financed) insurance schemes in developing countries and emerging markets that enable people to better adapt to the new risks resulting from climate change.

Climate insurance solutions could become a textbook example for cooperation between the public and private sectors. The roles of the individual cooperation partners are clearly defined based on the competences and resources of each:

  • The public sector defines the legal and regulatory framework and the socio-political aims. The establishment of weather databases, the development of publicly accessible risk information systems, and knowledge building among the population can also be supported at both national and international levels.

  • The insurance industry is responsible for the development and implementation of climate insurance solutions. To this end, it provides expertise, risk models, best practices from other countries and, most importantly, risk capital. Risk-commensurate premiums need to be charged for the mechanism to function in a lasting and stable manner. Only then will pricing adequately reflect the risk potential and create an incentive for people to take measures that reduce the risk.

In the past, diverging views between the private and public sectors often presented insurmountable obstacles in the realm of risk financing that made it impossible to develop insurance schemes in less developed countries. But there is a growing awareness that it is precisely these countries that have the most urgent need to adapt to the consequences of climate change.

Energy issues

The topic of energy is closely linked to both climate objectives and development policy goals. It is for this reason that the UN brought into being the Sustainable Energy for All (SE4All) initiative. The General Assembly has declared 2014–2024 the "Decade of Sustainable Energy for All", setting out the following goals to be achieved by 2030:

  • Ensure universal access to modern energy services

  • Double the global rate of improvement in energy efficiency (the ratio of GDP to energy use)

  • Double the share of renewable energy in the global energy mix

According to estimates by the World Bank, annual investment in the energy sector of between US$ 600bn and US$ 800bn will be required to develop the low-carbon energy technologies needed. More recent figures from the International Energy Agency (IEA) are even higher. Such amounts pose a formidable challenge. However, if we consider how the annual global inflow of capital into technologies for renewable energies increased fivefold between 2004 and 2015 to US$ 330bn, the target seems feasible.

Here too, the insurance industry can make a valuable contribution by safeguarding project risks and thus making energy projects more attractive to investors. Many of these risk-transfer solutions are special products requiring particular expertise. It is up to the political leaders, as with the insurance solutions for adaptation to climate change, to give clear signals and support the energy policy objectives with concrete initiatives. The aim should be to achieve additional cost efficiency through public-private partnerships and standardisation on the financing and risk-transfer side. The insurance industry can also play a major part by itself investing in energy projects.

International climate policy has opened a window of opportunity for a fresh approach. With its geoscientific and underwriting expertise, loss data from its NatCatSERVICE database, and by providing risk capital, Munich Re supports the development of insurance systems in the areas of climate change and natural catastrophes.

Ernst Rauch
Head of Corporate Climate Center,
Munich Re

Ground-water and air-pollution connection: Domino effect of changing climate

Climate change has altered India’s monsoon, with less rainfall overall in more intense bursts, and more frequent dry spells in between making life difficult for all. Mumbai in 2005, Chennai in 2015 and Bengaluru in 2016 were inundated due to abnormally high rainfall causing damages worth millions of dollars. Similarly, erratic rains have been regularly damaging crops threatening food security of the sub-continent. But here I would like to narrate a slightly more bizarre and toxic impact of climate change and the changing monsoon in India.

While working on Delhi’s air pollution crisis at the Centre for Science and Environment, a New Delhi based think tank in 2012, we were forced to start investigating the origin of a mysterious heavy smoke plume that had hovered around for the months of October-November and was poisoning the airshed of the whole Indo-Gangetic plain.

Satellite images of the period were populated with red dots of fire seen across the plains of Punjab and Haryana. A study by the Haryana Space Application Centre found that between October and November 2013 over 20 per cent of the state’s paddy area—some 200,000 ha—was burnt. With the retreating monsoon winds, that blow down south-east, picking up the smoke, full of toxins, and spreading it across one of the most densely populated river valley system on the earth, it further choked the already polluted cities like Delhi.

It was easy to blame it all on the routine practice of the farmers from the states of Punjab and Haryana who burned the leftover straw from the paddy harvest. But this was a recently developed practice, therefore it became critical to understand its genesis to end it.

Mechanisation of farming over the years had led to employment of harvesters to cut paddies. This system leaves straw and stubble on the ground which was not the case when harvesting was done manually. Therefore, the farmers burn the straw in the field. But this still didn’t quite explain the phenomena as the mechanisation of farming in the region took place years before the smoke plume started making the atmosphere turbid. There had to be another trigger.

The state of Punjab in 2009 enacted a law which prohibits farmers from transplanting rice in fields before June 10 of each year, which meant farmers were mandated to delay sowing of paddy crop in relation to the traditional practice. The downside is that the delay in planting rice resulted in delayed harvest, which leaves the farmer with little time to prepare the field for the next wheat crop. The neighbouring state of Haryana already had this law. Farmers who defy the law are fined Rs 10,000 per hectare per month.

This explained the eagerness of the farmers to burn their fields. But, what were these two states trying to achieve from these laws?

Water security.

Groundwater extraction for rice cultivation had created a big problem for Punjab. Over time, water levels have dropped rashly in the state, threatening water security of the state in particular and the region at large. To deal with this, the government enacted Punjab Preservation of Sub-Soil Water Act which basically tried to align the beginning of paddy cultivation with the new onset time of the monsoons. The two states are already recording improvement in their water table owning to their efforts to adapt to the changing monsoon.

This simple action to adapt to climate change and soften its adverse impact on the water resources in the area is now having unintended and deadly consequences across the larger region. 

India is right now struggling to find a viable fix to these intermingled problems hoping not to set off another crisis in the process. Hopefully, the global community will also understand that the challenges that climate change has started posing must no longer have straight jacket solutions.

For more details visit:

Avikal Somvanshi
Fulbright-Nehru Scholar at the Center for Urban Science and Progress,
New York University 

The dream of going green

The coal smoke causes heart disease and chronic bronchitis annually taking lives of 3 thousand people in Germany according to the report by Alliance for health and the environment (HEAL). Total costs for the treatment of citizens estimated to be around 6.5 billion euros. Because electricity from coal-fired plants is of strategic importance and there are no plans to reduce it in the nearest future, the organization called on German government at least to reduce the quotas of carbon dioxide emissions.

Although on the whole Germany’s production is far from clean, the stake of renewable energy is getting bigger. Among many reasons of “uncleanliness” is country’s determination to cut down nuclear power by 2022. After the Fukushima disaster cabinet of Angela Merkel decided to take bold steps - close all nuclear power plants. At that time the share of nuclear power accounted for 30% of total electricity production in Germany. It was assumed that hazardous nuclear power will be replaced by environmentally friendly renewable sources.

To make her point German chancellor even ordered to install solar panels on the roof of her office in Berlin. But instead of awaited renewable energy sources country rely heavily on coal-fired plants (substituting more expensive natural gas) which considered to be one of the main pollutants.

Despite the environmental drawbacks of coal-fired plants industry lobbyists have urged the government to accept coal as an interim technology on the way of transformation to green energy. Cabinet has agreed in general. More than 40% of energy used from power generation in the country is produced from coal. And there are no changes on the horizon judging by the statements of the German minister of the environment. Renewable energy is costly.

Germany’s dream to become 100% renewable is distant but attainable and the journey is long. In order to support German economy electricity prices should be levelled to competitors' prices in the industrialized world.

Speedy transition to the renewable sources of energy was heavily supported by German government. Although renewable energy is subsidised all over the world, Germany is exceptionally lavish: consumers pay more than 20 billion Euros each year through electricity bills. Germans shell out for power more than other Europeans (except Danes). Hence the increase of renewable electricity generation from 3.6% in 1990 to 30% in 2015 is only natural. For now, Germany can serve as an example of country which made a leap in adopting green energy.

"Access to clean, modern energy is of enormous value for all societies, but especially so in regions where reliable energy can offer profound improvements in quality of life, economic development and environmental sustainability, - said UNEP Executive Director Achim Steiner - Continued and increased investment in renewables is not only good for people and planet, but will be a key element in achieving international targets on climate change and sustainable development”.

While statements such as this seem promising, leading European countries doubt that the integration of renewable energy into established non-renewable models would be smooth. Intense pressure to conform to low-carbon standards often lead to haphazard and costly government-mandated policies, inhibiting the genuine efforts of important actors attempting to give voice to green revolution.

Green energy loom large on countries radar worldwide. Developing countries investments in renewables exceeded those of developed countries for the first time in 2015. Furthermore, starting from year 2004 the world has committed $2.3 trillion in investments for renewable energy (unadjusted for inflation) according to the UNEP.

Annual global investment in new renewables for the year 2015 estimated to be $266 billion, according to Global Trends in Renewable Energy Investment 2016 published by the UN Environment Programme (UNEP). That is twice more than have been invested in coal and gas power stations in 2015.

Svitlana Ritharsic
Global Vision Institute


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