New World Bank fund to insure against climate disasters

Indonesia (AFP) - The World Bank yesterday launched a new US$150 million fund intended to help insure vulnerable countries against natural disasters and the increasing risk of climate change-linked crises.

The announcement follows a string of recent natural disasters across the world including record storms and a series of deadly quakes in Indonesia, where the Bank and International Monetary Fund are currently meeting.

The so-called Global Risk Financing Facility (GRiF), set up with money from Germany and Britain, will finance the creation of disaster insurance and other risk mechanisms so funds are available immediately when crises hit.

“What we are seeking to do... is to change the whole system so countries can rely on funding when necessary that’s reliable, that’s adequate, that’s rapid,” said Matthew Rycroft, permanent secretary for Britain’s Department for International Development.

“If they combine that with national systems that work well, it can have a very significant benefit,” he added at a panel announcing the fund.

The World Bank and other international institutions already have several mechanisms in place to help nations adapt to the risk of a changing environment.
But the new fund is intended to bolster those programmes as the effects of climate change intensify.

“It’s too little, but it’s not too late, we really need to build the momentum change fundamentally the way we do our investment,” said Laura Tuck, the World Bank’s vice president for sustainable development.

Last week, experts warned of global climate chaos unless societies undertake unprecedented changes to prevent further climate warming.