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Insurance Agencies will be the best Advocates for Climate Change Abatement in near Future.

21 Mar

 

Kyoto Protocol participation map 2010.Green in...

Kyoto Protocol participation map 2010.Green indicates countries that have ratified the treaty; Dark green are Annex I and II countries that have ratified the treaty; Grey is not yet decided; Brown is no intention of ratifying. (Photo credit: Wikipedia)

The effect of Climate Risk on Business would perhaps be an important agenda for  discussions by Nations at the UNFCCC’s Rio+20 summit. As more and more damage to property, once predicted becomes reality the seriousness of addressing the issue would perhaps be more stronger in this CoP 17. But we all know of Nations which are still reluctant to be a part of the KP2 ( Kyoto Protocol ) or any other sensible treaty. Under this scenario, although it might sound a little unconventional, I think the champions for sustainable living would be the Insurance companies. For they have the most to lose when disaster strikes.

And for insurance companies in India, it would be worse. Let us understand this in perspective.

Location of Fukushima Tokyo=Metropolis

Location of Fukushima Tokyo=Metropolis (Wikipedia)

In Japan post Fukushima people are learning to become Sustainable as reported in this article from WRI. The “Fujisawa Sustainable Smart Town (Fujisawa SST)” is a smart choice, which I hope will be followed by others around the World. That a disaster of this magnitude was needed for Japan to think differently is sad. Natural calamity no one can predict with absolute accuracy, but one can always learn from the collateral damages and not repeat the same mistakes. Japan, the only country which  has experienced the horrors of Nuclear Bomb, to have chosen Nuclear Energy   which nearly brought back the potential of a similar scale of disaster;  reminds me of a Quote which was under the entry arch of my School, which said in  old English  –

He who knows, that he knows not; is a Child – Teach him

He who knows not, that he knows; is asleep – Awake him

He who knows not, that he knows not; is a fool – Shun him

He who knows that, he knows; is wise – Follow him

I will put Japan under  my quote above – He who knows not, that he knows; is asleep – Awake him. And I thank the Japanese people from all sane Humankind for having woken up from its slumber. (hopefully TEPCO too).

But today my story is not about Japan, neither about Germany which post Fukushima has closed down their Nuclear plants to be part of my quote above which says – He who knows that, he knows; is wise – Follow him.

This article is purely focused on India and its brethren who fall under the quote – He who knows, that he knows not; is a child -Teach him.

Before I carry this forward – I would make it very clear that I am proud to be an Indian. But not proud of its present political class. Under which general administration and ordinary living has suffered to such an extent that corruption has become norm. Corruption does not have to be financial all the time. Not adhering to simple traffic rules is also corruption. Having political arrogance where saner and cautious advise are not heeded to is also corruption. Every-time I see the video on Fukushima disaster, I watch with wonder the fantastic discipline the Japanese people had, even at the face of the disaster. That speaks volumes for the quality of administrative discipline and strength of character.

I live in Mumbai and within the second high risk zone of 75 KM. If one looks at this map  from Green Peace, which points to each Nuclear Plant on this planet, zooming in on India and clicking on the yellow dot will make ones mouth go dry.  Should disaster strike, we do not even have an exit route from Mumbai. Just one bridge connects the island of Mumbai close to the suburb of Chembur, called the Vashi bridge. No hovercraft, no steamers – no ferry service. God forbid if disaster strikes the isle of Mumbai, the mass exodus which would be more of a mob, will kill more than the disaster itself in the first 24 hours. And we have many more Nuclear plant sites. And unplanned growth all around.

I am not against Nuclear Power, I am against the possibility of facing the havoc of Nuclear disaster, should climate change creates situations where storms and tsunami become more and more prevalent. It is one thing to have death and destruction of a generation due to natural calamities, while it is completely different to suffer for generations from Nuclear fallout, which may happen due to damaged caused to a Nuclear facility in an earthquake / tsunami.

While I have pointed out the possible danger of a Nuclear accident, this article is about all the calamities and its resultant effect India shall face, due to effects of Climate change. While it is true, that India has come up with some super positive steps like NAPCC. We have much to accomplish, along with the whole World, while the time is running out. The Stern Review predicts that unless the World changes into low-carbon development from the high-carbon economic model we all currently follow, climate related disasters would increase and its mitigation could cost 20% of the World GDP, year on year post 2020. For densely populated India, which is also a growing economy, many new insurance instruments hereto not applicable are becoming norm. From simple insurance of remembering your important numbers to more complex health, property and corporate ones. Climate induced calamities would bring in untold economic loss.

This naturally brings into fore the insurance companies which need to compensate for losses which would occur. The year 2011 disasters, which occurred  world over,  is covered in this video and it gives one an idea of the scale of economic loss and the compensation which needed to be doled out. If such occurrence happen again and again as is the forecast, it would leave may Insurers penniless, which they would naturally not let happen. Therefore they would do what some have already done – CDP signatories are the banks, pension funds, asset managers, insurance companies and foundations. With USD 78 trillion, it has and will have lot of influence as time progresses to steer Nations into more sensible Sustainable life style. In time regional groups and sub-groups would be formed amongst local insurance players, all with the agenda of abating climate change and this would reach to the very grass-roots of society.

In my opinion, once again Ecology would be rescued by Economy, which ironically has been one of the principal cause for the human induced disasters we face today.

 

 

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