An urgent response to climate change

By Michael F. Rellosa

IF 11,000 scientists from 153 countries get together, agree and sign a paper (Ripple and colleagues, 2020), complete with the planet's vital signs indicating extremely worrying trends and, at the same time, exhibiting the lack of humanity's progress to halt and reverse climate change, then we better sit up, take notice and heed this clarion call for action. Since then, nearly 3,000 more scientists have added their signatures, and 1,990 jurisdictions in 34 countries have formally declared a climate emergency. If you are not living under a rock, you would have heard of the unprecedented snowballing of climate-related extreme events such as the devastating flooding in South America and Southeast Asia, record-breaking heat waves and the resultant wildfires in Australia and the Western United States, an extremely busy Atlantic hurricane season and apocalyptic cyclones in Africa, South Asia and the Western Pacific.

No wonder Ted Torres, erstwhile business editor of a rival paper, has been posting nonstop about climate change on his Facebook page. No wonder friends from the multilateral agencies have, likewise, been pushing solutions that are supposed to prepare us for such scenarios and to make our existence a bit more sustainable. Yet, nary a sign of concern or even acknowledgment that the future is bleak and that we need a multilateral, all of government, nay, all of nation — perhaps even an all of planet — approach to the problem at hand. It is unfortunate that other events, the ongoing pandemic, the geopolitical strains and general disintegration of society, the peddling of outright disinformation and the resultant cynicism of the populace have taken up much of our attention.

Be that as it may, the insurance industry in the Philippines — the country, which ranks as one of the most vulnerable to the effects of climate change and the resultant catastrophic perils — which is supposed to be experts at risk management and purveyor of appropriate solutions, has not even started to acknowledge the situation and barely scratched the surface in coming up with solutions. It is true that the government, together with business and the rest of the populace, finds itself in the same situation. However, it is my belief that the insurance industry should be among the first to respond.

In previous columns, I mentioned the various initiatives that the industry, the Insurance Commission and its partners and collaborators have come up with, such as the Philippine Catastrophe Insurance Facility, or PCIF, a scheme designed to pool the catastrophic perils taken on by the industry even out its peaks and valleys thereby lessening volatility, and increasing efficiencies while leveraging on size when dealing with the international reinsurance market, hopefully resulting in better and sustainable pricing. The other promising one is the introduction of a parametric product, the triggers of which would be excess rainfall and wind (read typhoon). The first iteration of this product is a scaled-down version, which could be sold on a stand-alone basis or bundled into the existing products of insurance companies. Owing to its size, it is currently designed for the underserved portion of the insuring public, but it is easily scalable to meet the needs of the mainstream. There are other initiatives such as the introduction of nature-based solutions, and a revved-up plan on education and awareness in conjunction with other concerned groups such as Arise Philippines (watch this space for more information).

It may be a start, but truth be told, we could do more. We could start by being acutely aware of the current situation, follow the science and gain an acceptance of what will be and what can be done to better prepare ourselves. Start early, start now, so that what solutions we have, to begin with, gain traction and are given a chance to stabilize and be able to work properly once the inevitable does occur. It is true that in a democracy, one cannot push one's ideas and expect everyone to follow. No one has a monopoly on good and workable ideas and solutions, but please realize that indeed there is no perfect solution. We could spend ample amounts of time to produce one that will be acceptable to all. Therein lies the rub, we do not have the luxury of time.