Developing a global market for climate risk information – flagship programme
The uncertainty and risks associated with climate change call for adequate and effective adaptation and climate risk data tools to help public and private stakeholders improve their decision-making process.
It is now widely accepted that climate-related catastrophic events are becoming more frequent and intense because of climate change. The European Commission have estimated that failure to adapt to climate change could reach €100 billion a year by 2020, rising to €250 billion a year by 2050 (EU, 2014).
Climate Risk Information (CRI) is a flagship programme from Climate-KIC that was launched in 2017. It is a collection of modelling and risk analytics tools which stakeholders (city planners, commodity traders, infrastructure investors and engineers, and businesses) can use to manage physical risk, reduce uncertainty and enable resilience-building decisions. EIT Funding has provided €3.9 million to the seventeen partner institutions who have worked within the Climate-KIC supported Oasis innovation projects (which now form an integral part of the CRI flagship) between 2012-2016. This funding has acted as a catalyst to building a new open market for climate and catastrophe risk assessment and adaptation planning information and services.
CRI aims to demonstrate the value of using climate risk data and models in end-user investment, insurance or planning decisions and thereby create confidence and growth in the market. We are interested in how data/models can lead to novel insurance business models and financial instruments like resilience bonds that incentivise investment into resilience.
At the core of CRI is the Oasis open-source loss modelling framework (Oasis LMF), which allows users to feed in a range of hazard, exposure and vulnerability data. Oasis LMF is backed by an insurance industry-led consortium, which values transparency, increasing access and use of available data and models.
Kirsten Dunlop, Chief Executive, Climate-KIC, Europe’s major climate innovation agency, says: “Climate-KIC upholds the principle of open market exchange as an agent for transformational change and disruption that, in this instance, produces a timely and much needed benefit to many. To this end, we have been a strategic partner of Oasis from the outset, and remain committed to attracting new partners and funding for Oasis, to catalyse and scale the global market for adaptation goods and services.”
CRI will focus resources on addressing the following priority areas:
1. Demonstrating the use of climate risk models and data for concrete end-user applications to demonstrate the value of using climate risk data and models in end-user investment, insurance or planning decisions and thereby create confidence and growth in the market. Key market segments for 2017 are Cities, Agriculture/Land Use, and Health.
2. Developing an e-marketplace for risk data and models to be exchanged and consumed: An online marketplace in which climate risk models and environmental risk data can be bought and sold, or through which models and data can be made available free-of-charge and where revenue is generated via transaction-levy.
3. Supporting key market enabling activity to maximise the value of the open market through cross-cutting efforts in education and capacity building to increase understanding, foster innovative risk transfer methods and lower the barriers to engagement.
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