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The Paris climate change conference: what does it mean for insurance?

CII Policy Briefing

Climate change has important implications for us as insurers and individuals. The world summit in Paris on climate change in December 2015, known as COP21, therefore merits our attention.

  • The most important issue is whether there will be a new international deal to succeed the abortive Kyoto Protocol, limiting greenhouse gas emissions (GHGs) to a safe level, consistent with a 2°C rise in temperature. The preparatory draft text is inadequate, and the potential pledges by countries on their own GHGs are insufficient. 
  • There are hopeful signs, since China and the USA (the world's largest emitters) have both expressed the wish for a successful COP21, leading to decarbonisation in the longer term. 
  • However, a large number of issues remain to be resolved. Finance for developing countries to adapt to climate change and adopt clean energy is a prime one. 
  • The issue of direct interest to non-life insurers is the Warsaw International Mechanism on Loss and Damage, due to make an interim report at COP21. For asset managers, the focus is on the discussions around finance.

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