Author(s)

Shih-Fang Lo^1*, Chou-Yen Wu², Chun-Hsu Lin¹

¹Center for Green Economy, Chung-Hua Institution for Economic Research, Taipei city.
²Research Division V, Taiwan Institute of Economic Research, Taipei city.

Extreme weather has been having an increase in frequency and severity because of global warming. Heavy financial burden on governments has been increasing as reconstruction of natural disaster and prevention of public construction spending. Unlike the climate mitigation activities, the main purpose of climate adaptation is to establish climate risk management system. We discuss several types of financing instruments and collect several cases in both developed and developing countries internationally. We find that budget reallocation or government bonds are regularly used for losses from natural disaster in developing countries while both government bonds and insurance penetration are used to against catastrophe risks in the developed countries. Finally, we also find that insurance-related instruments are feasible and have been applied in some middle-income countries with assistance from the World Bank.

Climate Change Adaptation, Insurance Tools, Capital Market, Review, Case Study

Lo, S. , Wu, C. and Lin, C. (2016) Financial Support Mechanisms and Financing Instruments for Climate Change Adaptation. Journal of Environmental Protection, 7, 242-252. doi: 10.4236/jep.2016.72021.