gib2015_closing financing gap in resilient infrastructure_bresch
TRANSCRIPT
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.
Economics of Climate Adaptation Dr. David N. Bresch, Global Head Sustainability, Swiss Re [email protected]
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
§ 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.
Objectives
4
Total climate risk
Dr. David N. Bresch | Insurance Europe | 27 May 2015
Climate-resilient development needs to assess and address total climate risk
Guyana: Flash flood risk to a developing urban area
Tanzania 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 Bank.
China: Drought risk to agriculture
The working group studied more than 20 regions with diverse climate hazards
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
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 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
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
§ 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
Further information
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
Dr. David N. Bresch | Insurance Europe | 27 May 2015 12
Publicly available documentation
Hull, UK: Flood and storm risk to urban property
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/E
cono
mic
s_of
_Clim
ate_
Ada
ptio
n_U
K_F
acts
heet
New York: Tropical cyclones and storm surge risk to a metropolis
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/E
CA
_New
_Yor
k_G
ov_F
acts
heet
ECA full report featuring the first 8 case studies, 164 pages
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/EC
A+B
roch
ure-
Fina
l.pdf
US Gulf Coast: Hurricane risk to the energy system
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/E
nter
gy_s
tudy
_exe
c_re
port_
2010
1014
Caribbean: Hurricane risk to small islands
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/EC
A+B
roch
ure-
Fina
l.pdf
Guayana: Flash flood risk to a developing urban area
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/E
cono
mic
s_of
_Clim
ate_
Ada
ptio
n_G
uyan
a_Fa
ctsh
eet_
en.
Mali: Risk of climate zone shift to agriculture
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/E
cono
mic
s_of
_Clim
ate_
Ada
ptat
ion_
Fact
shee
t_M
ali.p
df
India: Drought risk to agriculture
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/E
cono
mic
s_of
_Clim
ate_
Ada
ptat
ion_
Indi
a_Fa
ctsh
eet.p
df
China: Drought risk to agriculture
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/re
thin
king
_sha
ping
_clim
ate_
resi
lent
_dev
elop
men
t_en
#pag
e=74
A global overview of ECA studies with a focus on infrastructure
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/E
cono
mic
s_of
_Clim
ate_
Ada
ptat
ion_
focu
s_in
frast
ruc
ture
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
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