GIB2015_Closing Financing Gap in Resilient Infrastructure_Bresch
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This presentation discusses economics of climate adaptation and was presented at the 5th GIB Summit on May 27-28, 2015. It outlines a methodology called Economics of Climate Adaptation to systematically assess total climate risk, identify cost-effective adaptation investments, and integrate adaptation with development. Case studies of locations like Hull, UK, New York City, and the US Gulf Coast are discussed. Public-private partnerships are highlighted as important to shape climate-resilient development. More information is available on the GIB Foundation website.
GIB2015_Closing Financing Gap in Resilient Infrastructure_Bresch
- 1. This presentation was held during the 5th GIB Summit, May 27-28 2015. The presentation and more information on the Global Infrastructure Basel Foundation are available on www.gib-foundation.org The next GIB Summit will take place in Basel, May 24-25, 2016. The information and views set out in this presenation are those of the author(s) and do not necessarily reflect the opinion of the Global Infrastructure Basel Foundation. Neither the Global Infrastructure Basel Foundation nor any person acting on its behalf may be held responsible for the use of the information contained therein.
- 2. Economics of Climate Adaptation Dr. David N. Bresch, Global Head Sustainability, Swiss Re david_bresch@swissre.com
- 3. 3 § What is the potential natural catastrophe and climate- related loss over the coming decade? § How much of that loss can we avert? How? § What investment will be required? Do the benefits outweigh the costs? § What arrangements are needed for rare but severe events? Reducing the disaster gap is an urgent priority Dr. David N. Bresch | Insurance Europe | 27 May 2015
- 4. § Facts and methods for decision makers to design and execute a climate adaptation strategy § Information to insurers and potential funders to unlock risk prevention funding and deepen global risk transfer markets Methodology – Economics of Climate Adaptation (ECA) 1. Rigorous risk management approach to assess the sum of: § today’s climate risk; § the economic development paths that might put greater population and value at risk; and § the additional risks presented by climate change. 2. Propose and prioritize a basket of adaptation measures to address total climate risk on an economic basis. Objective s 4 Total climate risk Dr. David N. Bresch | Insurance Europe | 27 May 2015 Climate-resilient development needs to assess and address total climate risk
- 5. Guyana: Flash flood risk to a developing urban area Tanzan ia Tanzania: Drought risk to health and power generation Samoa: Risk of sea level rise to a small island state Florida: Hurricane risk to public and private assets Mali: Risk of climate zone shift to agriculture India: Drought risk to agriculture Caribbean: Hurricane risk to small islands US Gulf Coast: Hurricane risk to the energy system New York: Cyclones and storm surge risk to a metropolis Hull, UK: Flood and storm risk to urban property Economics of Climate Adaptation (ECA) Working Group, a partnership between the Global Environment Facility, McKinsey & Company, Swiss Re, the Rockefeller Foundation, ClimateWorks Foundation, the European Commission, and Standard Chartered China: Drought risk to agriculture The working group studied more than 20 regions with diverse climate hazards
- 6. 6 http://media.swissre.com/documents/Economics_of_Climate_Adaption_UK_Factsheet.pdf Annual expected loss from wind, coastal and surface flooding High climate change scenario USD millions -44% +23 +17 Potential impact from climate change x1.7 96 56 Today's expected loss total expected loss in 2030 Potential impact from economic growth -65% Dr. David N. Bresch | Insurance Europe | 27 May 2015 Total climate risk – city of Hull, UK, case study
- 7. Total asset and economic activity losses resulting from storm and flood (zip code level) – NYC, case study Source: www.nyc.gov: A Stronger More Resilient New York Climate change increases sea levels and alters hurricane frequencies Risks are concentrated in Southern Manhattan, Staten Island and Southern Brooklyn 7
- 8. 8 http://media.swissre.com/documents/Economics_of_Climate_Adaption_UK_Factsheet.pdf Dr. David N. Bresch | Insurance Europe | 27 May 2015 Adaptation cost curve – city of Hull, UK, case study
- 9. 9 www.swissre.com/rethinking/Building_a_resilient_Energy_Gulf_Coast.html http://media.swissre.com/documents/Entergy_study_exec_report_20101014.pdf Dr. David N. Bresch | Insurance Europe | 27 May 2015 Public Private Partnerships in risk transfer – US Gulf, risk to the energy system case study
- 10. § The custodians of economies need to prioritize adaptation measures to make societies more resilient to the impacts of climate change. § The Economics of Climate Adaptation (ECA) methodology provides decision makers with the facts to systematically identify cost effective investments. § The ECA allows decision-makers to integrate adaptation with economic development and sustainable growth. § The insurance industry's experience in risk management and modelling and in developing insurance solutions makes it an important partner in future adaptation plans. Dr. David N. Bresch | Insurance Europe | 27 May 2015 http://media.swissre.com/documents/Economics_of_Climate_Adaptation_focus_infrastructure.pdf http://media.swissre.com/documents/pub_closing_the_financial_gap_W1.pdf 10 Public Private Partnerships to shape climate- resilient development – Conclusions
- 11. Further information Dr. David N. Bresch | Insurance Europe | 27 May 2015
- 12. http://media.swissre.com/documents/Economics_of_Climate_Adaptation_focus_infrastructure.pdf http://media.swissre.com/documents/pub_closing_the_financial_gap_W1.pdf Dr. David N. Bresch | Insurance Europe | 27 May 2015 12 Publicly available documentation
- 13. Hull, UK: Flood and storm risk to urban property http://media.swissre.com/documents/ Economics_of_Climate_Adaption_UK_Factsheet.pdf New York: Tropical cyclones and storm surge risk to a metropolis http://media.swissre.com/documents/ ECA_New_York_Gov_Factsheet.pdf ECA full report featuring the first 8 case studies, 164 pages http://media.swissre.com/documents/ECA+Brochure- Final.pdf US Gulf Coast: Hurricane risk to the energy system http://media.swissre.com/documents/ Entergy_study_exec_report_20101014.pdf Caribbean: Hurricane risk to small islands http://media.swissre.com/documents/ECA+Brochure- Final.pdf Guayana: Flash flood risk to a developing urban area http://media.swissre.com/documents/ Economics_of_Climate_Adaption_Guyana_Factsheet_e n.pdf Mali: Risk of climate zone shift to agriculture http://media.swissre.com/documents/ Economics_of_Climate_Adaptation_Factsheet_Mali.pdf India: Drought risk to agriculture http://media.swissre.com/documents/ Economics_of_Climate_Adaptation_India_Factsheet.pdf China: Drought risk to agriculture http://media.swissre.com/documents/ rethinking_shaping_climate_resilent_development_en.p df#page=74 A global overview of ECA studies with a focus on infrastructure http://media.swissre.com/documents/ Economics_of_Climate_Adaptation_focus_infrastruc ture.pdf
- 14. 1) Analyze the total climate risk www.swissre.com/floodriskapp 2) Adapt cost-efficiently to the risk Dr. David N. Bresch | Insurance Europe | 27 May 2015 14 Explore Economics of Climate Adaptation in the Swiss Re Flood App
- 15. Legal notice ©2015 Swiss Re. All rights reserved. You are not permitted to create any modifications or derivative works of this presentation or to use it for commercial or other public purposes without the prior written permission of Swiss Re. The information and opinions contained in the presentation are provided as at the date of the presentation and are subject to change without notice. Although the information used was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage or loss resulting from the use of the information contained in this presentation is expressly excluded. Under no circumstances shall Swiss Re or its Group companies be liable for any financial or consequential loss relating to this presentation. Dr. David N. Bresch | Insurance Europe | 27 May 2015