Climate Insurance under the 2015 Paris Agreement: The Case of Ethiopian Insurance Corporation

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Addis Ababa University


Climate change is one of the greatest challenges of our times. The change is expected to continue into the coming century at rates projected to be unprecedented in recent human history. The scale, implications, and global nature of the problem dictate robust international cooperation within a structured framework. The UN in general and the UNFCCC in particular remain, in the view of many, the most representative and legitimate locus for international responses to climate change. Adaptation to climate change, including support for insurance instruments, has emerged on the climate agenda alongside the reduction of atmospheric greenhouse gas concentrations as an essential part of the response to climate change risks. Climate insurance is reaffirmed in the UNFCCC and also further strengthened in the Paris agreement in 2015 which allowed risk insurance facilities, climate risk pooling and other insurance solutions. In other words is considered as an essential tool to address loss and damage associated with the adverse effect of climate changes. Ethiopia is one of the countries affected by climate change. Over half a century Ethiopia has experienced several episodes of devastating droughts and lingering rainfall variability. These manifestations of climate change affect ecosystem, water resource, food security, and human health. Therefore, successful adaptation to the changing state of the environment requires pertinent and adequate adaptive capacities. An important cornerstone for risk management, a possible no-regrets adaptation strategy, and an indispensable tool to address loss and damage is insurance. However, In spite of the fact that Ethiopia has contributed very little to the climate change problem, those vulnerable rural farmers of the country are expected to pay insurance premiums to cover events made worse by climate change, ultimately would be unjust and contrary to the principles of the UNFCCC and the Paris Agreement. Thus, the core assertion of the paper is climate insurance in line with the Paris agreement and assesses its implementation in the EIC; however, much has yet to be done to effectively realize climate insurance in our country, Ethiopia



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