The economy or the climate? It’s not a choice

What concerns me the most about risk is that 10 years from now, we’ll look back and say: “We knew, and we didn’t do enough” or “we didn’t do what we could have done”.

Coping with the economic and climate change crises is unfortunately no longer seen as a continuum, but as opposing choices. There’s an idea out there that somehow we can’t have both. We need to go beyond this thinking in boxes. Since smart risk management is about taking a holistic approach to situations, we should do the same when it comes to the economic and climate change challenges we’re facing.

Adaptation measures should be part of a country’s blueprint for the future if is to bounce back quickly following an extreme weather event. This is vital because the insurability of all climate-related risks depends as much on social, environmental and urban planning as it does on physical defences and disaster preparedness.

The challenges of climate adaptation are particularly pressing in the developing world (although not only there as Hurricane Sandy has shown). In developing countries especially, partnerships between the global insurance industry, public-sector institutions and civil society are vital to unlock innovation and create new investment opportunities. Public-private collaboration would help make available more funding for adaptation at a time when it is more urgently needed than ever.

Going back to whether we can address both climate change risks and the economy at the same time, I believe we not only could, but should.  We can already do a great deal through proper risk planning and adaptation measures – things that could help save lives, spur economic activity and protect government budgets.

Author: David Cole is Chief Risk Officer at Swiss Re, a partner of the Global Risks 2013 report.

Image: A roller coaster restrs in the ocean after the boardwalk it was built upon collapsed during Hurricane Sandy REUTERS/Andrew Burton