GIB2015_Closing Financing Gap in Resilient Infrastructure_Bresch

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]

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§  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

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Total climate risk


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%


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

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8 http://media.swissre.com/documents/Economics_of_Climate_Adaption_UK_Factsheet.pdf


Adaptation cost curve – city of Hull, UK, case study

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www.swissre.com/rethinking/Building_a_resilient_Energy_Gulf_Coast.html http://media.swissre.com/documents/Entergy_study_exec_report_20101014.pdf


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.


http://media.swissre.com/documents/Economics_of_Climate_Adaptation_focus_infrastructure.pdf http://media.swissre.com/documents/pub_closing_the_financial_gap_W1.pdf

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Public Private Partnerships to shape climate-resilient development – Conclusions

Further information


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

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issr

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ents

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Ada

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heet

.pdf

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

.pdf

ECA full report featuring the first 8 case studies, 164 pages

http

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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

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edia

.sw

issr

e.co

m/d

ocum

ents

/E

nter

gy_s

tudy

_exe

c_re

port_

2010

1014

.pdf

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

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edia

.sw

issr

e.co

m/d

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ents

/E

cono

mic

s_of

_Clim

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Ada

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uyan

a_Fa

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pdf

Mali: Risk of climate zone shift to agriculture

http

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edia

.sw

issr

e.co

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ents

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cono

mic

s_of

_Clim

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Ada

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Fact

shee

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India: Drought risk to agriculture

http

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Ada

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Indi

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China: Drought risk to agriculture

http

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thin

king

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_clim

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.pdf

#pag

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A global overview of ECA studies with a focus on infrastructure

http

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Ada

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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

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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.


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GIB2015_Closing Financing Gap in Resilient Infrastructure_Bresch