Climate

Investing in climate change adaptation

Among today’s most challenging issues, climate change presents a serious threat to food, water and energy security globally, causing the frequency and severity of weather fluctuations and natural disasters to increase substantially. In terms of development, failing to adapt to climate change could erode decades of progress and cause millions of people to fall into poverty. Climate insurance presents an innovative measure to help vulnerable populations cope with extreme weather events.


Climate related threats affect low income individuals most

The economic cost of weather related events presents a huge financial burden, especially for the world’s poorest. Low income households are the most vulnerable to these events as they have few tools to manage risk or savings to fall back on. Consequently, when faced with extreme weather fluctuations such as droughts, floods or storms, these households may be forced to resort to desperate coping strategies such as selling assets, reducing food consumption or taking children out of school.


Building the resilience to the evolving threats of climate change

Climate insurance reduces the vulnerabilities of low-income individuals to climate threats by providing weather index based insurance as a risk management instrument. Crops, livestock and other sources of income and assets of micro entrepreneurs and low income-individuals can be insured. Low-income individuals are thus better equipped to absorb and recover from the financial burden of weather related shocks.

Read about the Climate Insurance Fund.