Publication

With a focus on relief and recovery, the existing disaster management fails to provide incentives for disaster risk reduction. So, articles 4.8 of the UNFCCC and 3.14 of the Kyoto Protocol have included the provision of insurance as an adaptation instrument to address climate risks. Bangladesh and Ethiopian NAPAs have included it as priority projects. Crop insurance exists in some countries, but with government subsidy. Countries like India, Malawi and Ethiopia have started index-based crop insurance targeted at small-scale farmers, in partnership with some development agencies. In Bangladesh, the existing micro loan or life insurance products of some MFIs do not cover property or crop losses from weather-related disasters. Crop insurance, initiated in the late 1970s, did not succeed because of moral hazards and institutional weaknesses. A study done by the Department of Environmental Science and Management (DESM) at NSU shows that total costs of relief and recovery related to climate-related disaster like floods do not exceed the likely indemnities to farmers, based on subsidized premiums. What is needed for the purpose is a partnership among global development agencies, disaster management and climate change communities for implementation of the convention provision of insurance in the form of index-based crop insurance in the LDCs.