Index-based insurance is emerging as a powerful tool for climate resilience, especially for smallholder farmers. Key success factors include reducing basis risk, improving user understanding, and ensuring financial accessibility.
A World Bank study found that index-based insurance can cut farmer vulnerability by up to 25%. In Ethiopia, the R4 Rural Resilience Initiative has insured over 200,000 farmers, boosting savings by 25% and agricultural investments by 22%.
Willingness to pay studies show promise too. A meta-analysis across 17 countries revealed households are ready to spend about 4.1% of their income on climate resilience measures.
The Green Climate Fund is well-positioned to scale up these innovative approaches, which would help us more effectively bridge the climate finance gap.
For more details, check out the full report by the GCF’s Independent Evaluation Unit, Green Climate Fund https://lnkd.in/gW75sEWV
#ClimateFinance #IndexInsurance #ClimateResilience #GreenClimateFund
#SustainableAgriculture #ClimateAction #InnovativeFinance
Bapon (SHM) Fakhruddin, PhD 