Farm insurance may help poor confront climate risk
OSLO - A new form of insurance that covers risks such as droughts or floods could help small farmers in developing countries cope with worsening impacts of global warming, a U.N. backed report said on Wednesday.
Under "index insurance", payouts are linked to a yardstick such as a shortfall of rains in the maize growing season in Malawi or the height of the Mekong River near rice paddies in Vietnam that risk flooding.
In theory, such a system is simpler and so cheaper than normal farm insurance, which pays compensation for crop failures only after insurance companies document losses at each farm.
"Index insurance offers new opportunities for managing climate risk in developing countries," according to the report by the International Research Institute for Climate and Society at Columbia University in New York.
Greenhouse gases, mainly from burning fossil fuels, are stoking global warming that will disrupt food and water supplies with heatwaves, floods, desertification and rising sea levels, the U.N. Climate Panel says.