The European Union will set up a “climate insurance alliance” to better cover losses as global warming increases the frequency and intensity of droughts, floods and wildfires.
European Commission President Ursula von der Leyen announced the initiative as part of her state of the union address Wednesday, saying that with only a
quarter of catastrophic losses privately, many costs fall on national budgets. A climate resilience framework, due next month, will map 100 of the most vulnerable regions in the bloc, she added.
The initiative comes after what von der Leyen dubbed the “summer of truth,” when a series of heat waves wildfire triggered across Europe and key rivers like the Rhine and Danube fell to record-low levels. The continent is wa
rming twice as fast as the global average, threatening economic damages that could spiral into hundreds of billions of euros.
“There can be no repeat of this summer,” von der Leyen said. “Far too often, national budgets become the insurance of last resort. We need to take action to close this gap.”
The alliance will aim to increase insurance uptake, promote instruments that incentivize risk prevention and make sure that schemes are adequate to mee
t the growing challenge posed by natural catastrophes, a commission attender said. The alliance will be made up of insurers, experts, investors and regulators, they said.
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Von der Leyen announced that the commission, the bloc’s executive branch, would put forward a European Water Initiative to fight waste, adding that key rivers
, like the Danube and the Garonne were “disappearing before eyes.” A heat wave plan will be put forward, as well as proposals for a E
uropean firefighting fleet, she said.
With around 90% of some rare earths currently coming from China, the EU will also establish a European Corporation on Critical Raw Materials to stockpile key eleme
nts for clean transition technologies and defense, von der Leyen said. She started to accelerate the shift away from climate-warming fossil fuels, which has soared in price after the Iran war impeded flows of oil and gas through the Strait of Hormuz.
“Since the start of the conflict, imported fossil fuels cost us an additional €90 billion, without a single molecule of energy added,” von der Leyen said. “We need to double down on our affordable and homegrown, clean energy; be it renewables and nuclear.”
