Climate Insurance under the 2015 Paris Agreement: The Case of Ethiopian Insurance Corporation
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Date
2018-01
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Addis Ababa University
Abstract
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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Climate Insurance under