Abstract

The paper outlines the role of insurance as an economic policy tool that can be used to address the issue of climate change. The magnitude of potential loss, the adverse social and economic consequences for millions of people and considerable fiscal strain imposed on government budgets by extreme weather events all indicate that governments can benefit significantly from the use of an insurance instrument capable not only of covering damage but also of providing an incentive for risk reduction behaviours. By examining the diverse insurance systems that exist in European countries and grouping them into five stylised models, natural hazards insurance is examined in terms of private and public involvement. The paper analyses the performance of different insurance models in relation to information imperfections (i.e. adverse selection and moral hazard) and market imperfections (i.e. charity hazard and transaction costs). In addition, the different models are examined in terms of the extent to which they incentivise mechanisms that facilitate the mitigation of greenhouse gas emissions, adaptation to the inevitable impacts of climate change and the development of climate risk finance management. Some concluding remarks are offered regarding the possible future development of a European insurance model as a means of developing an economically effective response to natural hazards caused by climate change.

Autore Pugliese

• Porrini Donatella

Tutti gli autori

• D. Porrini , R. Schwarze

Titolo volume/Rivista

EUROPEAN JOURNAL OF LAW AND ECONOMICS

Anno di pubblicazione

2014

ISSN

0929-1261

ISBN

Non Disponibile

Numero di citazioni Wos

7

Ultimo Aggiornamento Citazioni

27/04/2018

Numero di citazioni Scopus

8

Ultimo Aggiornamento Citazioni

26/04/2018

Settori ERC

Non Disponibile

Codici ASJC

Non Disponibile