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.
CRI will focus resources on addressing the following priority areas:
- 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.
- 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.
- 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.
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.
Kirsten Dunlop, Chief Executive of Climate-KIC