European insurers have called the European Commission to radically enhance its efforts around the EU’s strategy for adaptation to climate change.
They have urged the EU to enhance its efforts to increase climate change adaptation, which, given the scale of the challenge it presents, must be ambitious.
In a position paper submitted as a response to consultation to the proposed strategy Insurance Europe said: “Some of the consequences of climate change are already becoming apparent. This means that mitigation actions alone are not enough to address the economic, social, and environmental implications of a changing climate.
“To this end, it is essential to collect, share and monitor data at various governance levels to provide a clear overview of what kinds of adaptation measures need to be taken by member states. While it is important to recognise that each member state is affected by climate change differently and that therefore there is no one-size-fits-all solution at a European level, the EU has a key role to play in coordinating adaptation efforts.”
It added: “Insurance Europe supports the European Commission’s aim of adopting a new, more ambitious EU strategy on adaptation to climate change as part of the European Green Deal. As climate change will continue to create significant upheaval in Europe (and beyond), despite mitigation efforts, climate change adaptation continues to be a key priority of insurers, who have long campaigned about the need for policymakers to not only take measures to mitigate the effects of climate change, but also to invest in adapting to its consequences.
“Climate change is already manifesting itself in increasingly damaging natural hazard events, and an adequate balance between mitigation and adaptation must be met. Beyond adaptation, Europe’s re/insurers are ready to continue contributing to the EU’s political commitment to be climate neutral by 2050.”
“The re/insurance industry has long recognised the threats posed by climate change and acknowledges the central role insurance plays in identifying, measuring, and pricing material climate risks,” added Insurance Europe. “The industry is therefore keen to continue playing a leading role in financing the transition to carbon-neutrality, resource-efficiency and greater sustainability. Given its importance, the insurance industry is willing to continue to contribute to the Commission’s efforts on climate change adaptation.”
The paper said for the European re/insurance industry, however, there remain key shortcomings of the EU Adaptation Strategy. These include:
- It was not sufficiently forward-looking in addressing the future impact of climate change (>2°C).
- Climate change adaptation has not yet been effectively mainstreamed in EU policies. Nor has it been sufficiently well-aligned to sub-national, national, and international policies and actions.
- The strategy was not effective enough in shifting priorities and actions from post-disaster to pre-disaster.
- Knowledge gaps remain, best practices are not sufficiently well shared across member states and awareness levels of adaptation remain low.
- The strategy did not help member states to improve the link between vulnerability, funding, and insurance as a risk management tool.
“It is the view of European re/insurers that even if measures that radically reduce greenhouse gas (GHG) emissions were to be adopted, climate change mitigation measures would no longer be enough,” added Insurance Europe. “Extreme weather events are already frequent and severe and the number and scale of these events is likely to increase further. Indeed, mitigation actions alone are not enough to address the economic, social, and environmental implications of a changing climate. More prominence must be given to adaptation.”
It said the new and more ambitious EU strategy on adaptation to climate change “is a vital opportunity for the EU to build up adaptation capacity and therefore resilience”.
This will also improve insurability through the enforcement of adaptation measures and should be the first step in minimising the damage that is caused by natural hazard events in Europe today.
“More high quality and usable data on climate risks is needed,” said Insurance Europe. “The pre-requisite for the pricing of climate risks is good data on how such risks can materialise and affect the real economy. The EU is in a favourable position to support EU-wide efforts to model physical risks relating to climate, which ought to be accessible on an affordable, digital platform to all investors and insurers – and possibly the whole of society in order to create a well-informed, level playing field.”