It’s a relief to see that G7 leaders didn’t entirely forget about climate impacts. They seem to remember the responsibility of industrialised countries to make amends for their large share of CO2 emissions. They announced an initiative to cover up to 400 million people in vulnerable countries with insurance instruments to help manage a portion of the climate risk that they face. There are many unanswered questions though.
First, how will the approaches really benefit poor and vulnerable people who cannot pay premiums? Focusing on risk platforms such as the African Risk Capacity (ARC) is a good start. Such platforms offer safety nets and assist vulnerable communities. However, more details are needed on how the implementation will directly benefit vulnerable people, especially considering if they may not be able to pay insurance premiums.
Second, the G7 statement doesn’t say much about the immediate way forward, or about how much money will be put into the initiative. It is important that implementation will be done in consultation with affected countries’ governments, civil society and vulnerable groups. In addition, the initiative should properly follow through with an M&E system that looks at whether vulnerable people receive assistance and truly benefit.
Third, climate risk insurance has a contextual background in the UNFCCC. The G7 initiative should not attempt to shift the climate risk burden to people and communities by asking them to buy insurance from the private sector. Climate insurance by itself is not a silver bullet, instead a comprehensive strategy is needed for Paris and beyond to appropriately respond to the entire loss and damage challenge.