Insurance against climate risk. This is essentially the idea covered by the Global Shield, a new structure launched by Germany and the V20, which brings together around sixty vulnerable countries. Funded by the G7, it was officially announced on Monday 14 November at COP27 in Egypt. It is equipped with an amount of 200 million euros and can be used by vulnerable countries, upstream or downstream of a climate disaster.
In practice, it should allow these countries to quickly access funds for insurance and protection against disasters, after floods or droughts. “It can be adaptive social protection systems”Where “immediate financial support for a government to rebuild a bridge or a school”explained German Development Minister Svenja Schulze at a press conference.
Overcome low funding
The establishment of this new system had been approved in principle by the G7 countries, the seven main Western countries, at their summit in June. The structure aims to overcome “weaknesses in financial protection structures” in these often already heavily indebted countries.
Among the first recipients will be Bangladesh, Costa Rica, Fiji, Ghana, Pakistan, the Philippines and Senegal, according to the press release from Germany. The 200 million euro shield is mainly financed by Germany, and to a lesser extent by France, Ireland, Denmark and Canada. The US should also contribute. However, these amounts remain a drop in the bucket. The V20 estimates that the damage caused by climate impacts on member economies amounts to $525 billion since 2000.
Insurance device
“It is a concrete commitment on the part of France, which is mobilizing new funds here in the form of donations – 20 million euros – to launch a tool whose potential (…) is realresponded Fanny Petitbon, from the NGO Care. On the other hand, it is regrettable that France chose to direct its contribution to one of the funds in the “Shield”, which is mainly centered on the private sector. »
Some NGOs are actually reserved about the way the system is designed. It’s not about “compensation” sheer for loss and damage caused by climate change, a claim by the developing countries towards responsibility “historic” developed countries in climate change, but of a “shield” which, in addition to public funds, will partly mobilize private insurance players.
Damages are not covered
This vision “insurance” loss and damage raises more fears in civil society: it places the burden of insurance premiums on countries already in debt; does not cover certain slow weather risks (such as rising sea levels) or certain sectors; not to mention that private insurers may prove reluctant to insure certain future risks – or see premiums skyrocket – given the spread of climate disasters around the world.
The shield “is not a tactic to avoid formal negotiations on loss and damage or financial arrangements at this COP”assured Svenja Schulze, noting that it was not “not the only solution” to this problem and that slowly occurring events or so-called losses should also be addressed. “wasteful”. The device should be implemented in the coming months.
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