Climate Change, An Uninsurable Risk - What Role Should Finance Play?
Webinar - Barbados
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Despite all the talk, the international community is abandoning the commitment to cap the increase in the average global temperature to 1.5°C (IPCC, 2018). One critical reason is that while all of humanity will be affected by climate change, someday, the initial impact is highly differentiated.
Higher temperatures will first become insufferable where it is already warm. Warming will initially benefit places that are currently cold. And because of the earth’s rotation, when the polar ice caps melt, sea levels will rise near the equator (Spade et al. 2013). North of the Tropic of Cancer and south of the Tropic of Capricorn, the horror of climate change is forecast, not current, and based on models and theories few understand. Consequently, the sense of urgency is not there from those who need to make a difference today.
The frontline in the war against climate change currently lies between the tropics. Extreme weather events caused $320 billion of losses and damage around the world in 2017, but $215 billion, or 67%, occurred in the Atlantic hurricane belt, with a country like Dominica losing 226% of GDP in a few hours (Löw 2018). Climate change is the lived reality for these places; denial is rare.
Those in northern climes tell them they should insure themselves more, try catastrophe bonds, or other forms of parametric insurance. But increasingly known wipe-out risks with rising intensity, frequency and correlation are in essence uninsurable. Rather like someone with a pre-existing life threatening disease looking for medical insurance. What should they do and what role can finance play?
Speaker:
Avinash Persaud's career spans finance, public policy and academia. He is Emeritus Professor of Gresham College and an advisor to Governments on financial policy. He was Chair, CARICOM Commission on the Economy and is currently Special Envoy to Prime Minister Mottley, the current Chair of the Development Committee of the IMF and World Bank.
He is a former senior executive at GAM London, State Street, J. P. Morgan and UBS. He was Chairman, regulatory sub-committee of the UN Commission on Financial Reform; Chairman, Warwick Commission; Member of the UK Treasury’s Audit and Risk Committee and the Pew Task Force to the US Senate Banking Committee; Visiting Scholar at the IMF and ECB and Distinguished Advisor, Financial Sector Law Reform Commission of India.
He is a former Governor, London School of Economics and 2010 President of the British Association for the Advancement of Science (Section F). He was elected Trustee of the Global Association of Risk Professionals and the Royal Economics Society. He won the Jacques de Larosiere Award in Global Finance from the Institute of International Finance and was voted one of the top three public intellectuals in the world on the financial crisis by a panel for Prospect Magazine.
Speaker(s):
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Professor Avinash Persaud
Emeritus Professor
Gresham College
Chairman:
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Professor Michael Mainelli
Executive Chairman
Z/Yen Group