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Liability insurance for climate change

Connor Spreng's picture


Our response to climate change at the global level clearly needs improving. While some governments are managing to set and enforce limits on the emission of greenhouse gases, an international agreement that is both enforceable and meaningful remains elusive. Measures undertaken by private individuals and organizations, though plentiful, largely fail to connect to the political process and continue to fall short in aggregate. Is there a way to combine these public and private efforts? We think there is, as we’ve explored in a recent NZZ article and ETH blog post: a new type of liability insurance.

Looking to the insurance industry for addressing climate change is not new (see, for example, Nobel Laureate Robert Shiller’s column; the Geneva Association’s statement; and the climate change and insurance links discussed at the World Bank’s recent Understanding Risk conference). What has been lacking, however, are ideas for employing insurance instruments at scale, across national boundaries, and in a way that maximizes existing capacities and market mechanisms.

When, what, and how to survey after a disaster strikes – an experience from Tonga

Liana Razafindrazay's picture
Winny, an elementary teacher enumerating for the household survey (Uiha Island, Tonga, April 10, 2014). With the support from the Ministry of Education, 35 teachers from Ha'apai participated during the survey.

Back in March 2014, I had the opportunity to be part of a World Bank team supporting the Tongan government to develop a reconstruction policy after Tropical Cyclone Ian hit earlier this year. To implement the policy, the Ministry of Infrastructure led a series of surveys to inform housing reconstruction. This post, which does not intend to be scientific or exhaustive, is to share some of the key lessons I learned from this experience.

Damage assessments are routine in the aftermath of disasters, but they differ depending on their objectives (Hallegatte, 2012 - pdf). A rapid survey in the wake of a disaster event could help to estimate grossly the direct human and economic losses and damages. This type of survey is best to capture the amplitude and the severity of the disaster. However, such survey could present some flaws, often because the survey will be conducted in a very short time frame with minimal design. On the other hand, a survey conducted a few months after the event is best to understand better the context of the disaster. It also allows a better design and better preparation. But, equally, such survey could include biases. For instance, the time lag between the event and the survey itself could create some level of challenges. Most likely, people would have started to fix their houses or have moved away from the affected area, and that will add a layer of complexity to the survey.

From “High-Speed” to “High-Quality” Growth: Shenzhen, the birthplace of China's economic miracle, goes low-carbon

Xiaodong Wang's picture
Shenzhen, in south China, has grown from a small fishing community to a metropolis of 10 million people in just 35 years.
Shenzhen, in south China, has grown from a small fishing community to
a metropolis of 10 million people in just 35 years.
Shenzhen occupies a special place in modern Chinese reform history. Set up as the first Special Economic Zone under economic liberalization in 1980, the city has grown from a small fishing community to a metropolis of 10 million people in just 35 years.

Tonga: a national effort to reconstruct Ha’apai after Tropical Cyclone Ian

Liana Razafindrazay's picture
Woman with her baby in a shelter after Tropical Cyclone Ian hit the Ha'apai Islands (Haano Island, Tonga, April 9, 2014). The woman left Haano to deliver her baby in Lifuka Island (the capital of Ha'apai). When she got back, her house had been completely destroyed by the cyclone. She stays in a shelter with her baby and husband.

In the morning of January 11, 2014, after an early warning from the Department of Meteorology and the National Disaster Management Office on the upcoming category 5 tropical cyclone Ian, power and radio transmission went off on the Island of Ha’apai, one of the most populated among the 150 islands of the Tongan archipelago in the South Pacific.

The Pacific Islands are inherently prone to hazards due to their geographic location and small size. Each year Pacific Island countries experience damage and loss caused by natural disasters estimated at an average $284 million, or 1.7% of regional GDP (World Bank 2013). In the coming decades, climate change is expected to make things worse through sea level rise and more intense cyclones.

Philippines: Education that Knows No Boundaries

Nicholas Tenazas's picture
Filipino pride and boxing champion Manny Pacquiao completed highschool
under the Alternative Learning System, after taking the required exam in 2007
Photo by the DepEd

My relationship with the Philippine Department of Education’s (DepdEd) Alternative Learning System is one of ignorance, humiliation and inspiration.

As a young economist joining DepEd back in 2002, I was full of ideas on how to improve the country’s education system. I was coming in as a junior staff for a World Bank-funded project focusing on elementary education in poor provinces.

At around the same time, I had been hearing about this ALS program, which was providing basic education to out of school youth and adults, but I really paid no mind to it. All I knew about it was that it was largely non-formal, that it was conducted periodically through modules and that it was too small to make any significant statistical impact on globally-accepted education performance indicators.

A Bigger and Better Harvest: Myanmar’s Rice Export Opportunities

Sergiy Zorya's picture
A rice farmer in Myanmar
A farmer in Myanmar plows a rice field.
Photo: Nyain Thit Nyi / World Bank
 

I met a young rice farmer during my recent trip to Myanmar. He has a tiny plot of land on the outskirts of the irrigation system and could harvest only one rice crop a year.  Even if he worked hard, and the weather was at its best, he produced only enough rice to feed his family for 10 months. During the last two months of the rice-growing season, he would walk around his village, a small plastic cup in his hands, and ask neighbors if he could borrow some rice. This would happen year after year.

Unfortunately, this story is not uncommon. A majority of Myanmar’s laborers work in agriculture. A third of them live below the poverty line and depend on rice for survival.

China’s urbanization lessons can benefit the global community

Axel van Trotsenburg's picture
Also available in: 中文

(Infographic) China: Better Urbanization Leads to Higher-Quality Growth for All People

We all know urbanization is important: Nearly 80% of gross domestic product is generated in cities around the world. Countries must get urbanization right if they want to reach middle- or high-income status.

But urbanization is challenging, especially because badly planned cities can hamper economic transformation and cities can become breeding grounds for poverty, slums and squalor and drivers of pollution, environmental degradation and greenhouse gas emissions.

That’s why it’s important for us to build cities that are livable, with people-centered approaches to urbanization and development. That will allow innovation and new ideas to emerge and enable economic growth, job creation and higher productivity, while also saving energy and managing natural resources, emissions and disaster risks. When the process is driven by people, it can lead to important results, the same way London and Los Angeles addressed their air pollution problems.

中国城镇化经验可造福全世界

Axel van Trotsenburg's picture
Also available in: English

(Infographic) China: Better Urbanization Leads to Higher-Quality Growth for All People

众所周知,城镇化很重要:全世界近80%国内生产总值由城市创造。一国如想进入中等收入或高收入国家行列,就必须要正确推进城镇化。

但城镇化具有挑战性,突出原因在于规划很差的城市有可能阻碍经济转型,也有可能成为滋生贫困、贫民区和肮脏的温床,还有可能成为污染、环境退化和温室气体排放的驱动器。

这就是我们要采用“以人为本”的城镇化模式和发展模式构建宜居城市的原因所在。推进城镇化可促进创新,催生新创意,为经济增长、新增就业和提高生产率创造条件,同时还可以节约能源,管理自然资源、二氧化碳排放和灾害风险。城镇化进程如由人推动,就有可能产生重要成果。伦敦和洛杉矶就是采用这一方式来解决其空气污染问题的。

ASEAN Cooperation is Crucial to Global Food Security

Bruce Tolentino's picture


There is clear and present danger that another global food price crisis will emerge sooner than later. 

A key signal is the lackluster result of the December 2013 Ministerial meeting of the World Trade Organization (WTO) in Bali, Indonesia - in the heart of the ASEAN community. 

The compromises arising from the WTO Bali meeting further demonstrates that many WTO member-nations have returned to a focus on internal domestic politics, sacrificing long-term gains shared across nations, in favor of short-term gains motivated largely by domestic political survival or sheer short-sightedness.

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