The Pacific is our largest ocean – with half of Earth's oceanic water and around 25,000 islands.
Most Australians have spent many hours in the Pacific waters or on its shores, and we share an understanding with our Pacific neighbours of the serious challenges posed by global warming.
Pacific Small Island Developing States such as Fiji, the Cook Islands, Samoa, Vanuata, Tuvalu and Tonga are facing immediate threats from climate change. Extreme natural disasters are the most obvious manifestation. Rising sea levels, rising water temperatures, and depleted fish stocks are slow moving events that pose an existential threat.
These nations are taking action and are seeking support from the global community. Their focus is on disaster risk reduction, climate adaptation, and innovative finance and insurance solutions to support sustainable development and resilience in the face of climate risks.
This year Fiji holds the Presidency for COP23 – the 23rd annual Conference of the Parties to the UN Framework Convention on Climate Change. Fiji's leadership is drawing global attention to efforts to better adapt to, and manage, climate risk in the region.
Cooperation between the public and private sectors is vital to these efforts. A key example is the Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI). Launched in 2007, the program was advanced in 2016 with the establishment of the PCRAFI Facility, which is supported by reinsurers, including Swiss Re. This Facility
has since issued its first insurance policies to the Cook Islands, Marshall Islands, Tonga, Samoa and Vanuatu – securing these nations coverage of around US$38 million against tropical cyclones, earthquakes and tsunamis.
However, some Pacific Island nations are seeking more comprehensive finance and insurance support – going beyond payouts after a natural catastrophe.
I recently had the pleasure of joining panel sessions on climate risk finance and insurance at two Pacific Island events, on behalf of Swiss Re's Global Partnerships team. In June, the Government of Tuvalu, in collaboration with the UNDP and Australian Aid, convened a regional dialogue in Samoa on financial management of climate change risks, including the need for a Pacific climate change insurance facility. In July, I joined the COP 23 Climate Action Pacific Partnership (CAPP) event in Suva. The Prime Minister of Fiji, the Hon Frank Bainimarama, opened the CAPP event with a powerful address and a call to action to the global community for support, stating:
"Please do not abandon us, we in the Pacific who are among the most vulnerable to climate change. Please commit yourselves to showing solidarity with vulnerable nations around the world. Whether it is embracing more decisive climate action. Or giving developing nations readier access to adaptation finance and insurance that builds greater resilience and cleaner economies. Or to work more closely with the private sector and investors to do both."
On the final day of the CAPP event, leaders of Pacific Small Island Developing States (Pacific SIDS) issued a statement highlighting priorities for climate action, including consideration of a Pacific SIDS climate change insurance facility.
At Swiss Re, we know that there is a large protection gap – with around 70% of losses from natural catastrophes being uninsured. We know that 60% of climate-related disaster losses can be cost-effectively averted. We apply our knowledge and capital to develop and deliver innovative risk transfer solutions for governments and communities.
However, as COP23 proceeds, the climate risk challenges of Pacific Small Island Developing States may test our thinking and give us cause to consider the role of risk transfer solutions in the face of slow developing climate risks such as sea level rises. We will ask ourselves how we can help to meet the challenge set by the Prime Minister of Fiji and bring our expertise to bear on this enormous challenge for our Pacific neighbours.
Category: Climate/natural disasters: Climate change, Disaster risk, Earthquakes, Floods/storms, Resilience
Location: Sydney, New South Wales, Australia