Some rationales for risk sharing and financing adaptation

Abstract

Current climate variability and anticipated climate change challenge our water systems and our financial resources. The sharing of economic losses due to weather related hazards and the sharing of costs that result from protecting lives and property take place in different forms, but are currently insufficient. In this paper we discuss three different rationales for financing disaster losses through public and private arrangements, as well as options for financing adaptation, with a special focus on water management. We propose that financial arrangements for risk sharing and climate change adaptation should be reconsidered, in a more structured approach, to be able to deal with both disaster losses and the costs that arise because of climate change adaptation, e.g. for water management, in both developing and developed countries.