Transferring Climate Induced Disaster Risks Policy, Practices and Readiness of Bangladesh

Globally, the weather-related extreme events and associated loss and damages (L&D) have increased significantly. With of high confidence, the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC AR5) published in 2014 stated that the risks associated with those extreme weather events will further increase, putting the disproportionate burden of climate stress and associated losses to the most vulnerable poor countries and communities. In the face of growing weather extremes and associated L&Ds, the global policy stakeholders at the UNFCCC negotiation have long been in discussion for agreeing a comprehensive ‘multi-window mechanism’ for addressing L&D, however the differentiated political position on the demand for ‘loss compensation’ from the historical liability context of the developed countries made the process considerably delayed. It’s only in 2007, the 13th Conference of the Parties (COP 13) of the UNFCCC included L&D as an agenda item, roughly 16 years later since the issue was first raised in 1991 at the 46th General Assembly of the United Nations. Over the years, the developed country group denied any discussion despite the L&D had started to manifest; they also had long been able to hinder any progress in L&D negotiations as they feared to be held liable for causing L&Ds and compensate those. Despite strong opposition of the developed countries, the negotiation on L&D got significant momentum since COP 13; however, major progress achieved at COP 21 where the country Parties included a stand-alone article in the Paris Agreement (PA), with the provision of enhanced action and support, and approaches e.g. risk reduction, risk sharing, and risk transfer, and rehabilitation for addressing L&DS. Though the pre-Paris COP negotiations emphasized for a comprehensive ‘all inclusive’ mechanism, the post-Paris COP negotiations provided utmost focus on an ‘all alone’ mechanism e.g. insurance for addressing L&D. For instance, among three different but interconnected approaches, climate risk sharing, and risk transfer has become the priority concern with increased financial commitment and support primarily by the G7 and G20 country group who find ‘insurance’ apparently as an ultimate solution of addressing L&Ds. At COP 23 in 2017, the G20 countries launched their climate risk finance ‘the InsuResilience Global Partnership for Climate and Disaster Risk Finance’ also established a Multi-donor Trust Fund (MDTF) under the administering authority of the GFDRR/World Bank Group to implement the InsuResilience initiative. Despite the opportunities the climate risk insurance (CRI) provide, they are not appropriate for addressing longer-term foreseeable risks like sea-level rise and desertification, also the CRI may not cover the predictable L&Ds that the poor share-croppers and marginalized smallholders in the developing countries face almost in every year. There is less evidence that poor smallholders pay insurance premiums; it’s neither affordable by the smallholders, not justifiable to ask them to pay premiums. In many countries misconception on the risk transfer mechanisms exists, many of them still lack an appropriate regulatory framework for introducing CRI. In many places, people consider insurance as a mechanism that would deceive them, they also consider insurance too expensive. Therefore, CRI should not be considered as an ‘all alone’ solution as it has many structural limitations and setbacks. For instance, CRI could not be applied in transferring.