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Nature-based solutions
The document highlights the urgent need for transformative changes to combat climate change and ocean risk, particularly for vulnerable regions at risk of coastal flooding. It discusses barriers to private investment in natural capital, including a lack of understanding and inadequate policies, while emphasizing the role of research, innovation, and specialized finance products to promote investment in ocean resilience. Overall, it advocates for the development of projects and policies that enhance resilience and generate financial returns in the face of ocean-derived risks.
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Nature-based solutions
- 1. Nature-based solutions for climate change:from global ambition to local action Chip Cunliffe Director, Sustainable Development, AXA XL 22nd May 2020
- 2. Ocean Risk incontext Sea level and population density projections indicate that 800m will be at risk from coastal flooding and storm surges by 2050¹ Small Island Developing States and the Least Developed Countries are most threatened by ocean risk The IPCC states that climate change and anthropogenic pressures require ‘transformative changes’ to restore and protect nature ¹ https://www.c40.org/other/the-future-we-don-t-want-homepage ² https://www.preventionweb.net/risk/direct-indirect-losses ³ http://www.lloyds.com/~/media/Files/News%20and%20Insight/360%20Risk%20Insight/Global_Underinsurance_Report_311012.pdf In the last 10 years, insurers alone have paid out more than $300 billion for coastal storm damage – but this is dwarfed by amounts paid out by governments and taxpayers²
- 3. Lack of understandingof how investing in natural capital can provide a timely and productive return Limited pipeline of risk adjusted investable projects to attract financing Insufficient data and modelling capabilities for investors to quantify ocean-derived risk Inadequate enabling policies to shift investment away from unsustainable infrastructure Apparent need for investment returns to be available in a short time period 1 2 3 4 5 Barriers to private investment in natural capital
- 4. Science and Research Accelerateresearch and data to better analyse, predict, model manage ocean risk Practice and Innovation Build risk-adjusted scalable projects that deliver a return on investment while increasing resilience to ocean-derived risks Policy and Governance Inform and advance ocean resilience policy, governance, private sector and public understanding Pioneering finance products to regenerate coastal natural capital and build resilience in the most exposed and vulnerable regions and communities
- 5. ORRAA uses theexpertise of its membership to develop pioneering finance products Blue carbon credits Resilience credits Sovereign bonds Corporate bonds Catastrophe bonds Risk modelling expertise Parametric cover Policy wording Credit risk Risk pools RISK & INSURANCEFINANCE PRODUCTS Practice & Innovation
Editor's Notes
- #3 Protection gap is very wide. In all our interests to close it. Is the difference between the amount of insurance coverage that is economically beneficial and what is actually purchased. In some countries this is as high as 95%.