(Bloomberg) --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 catastrophe losses privately insured, 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 triggered wildfires across Europe and key
"There can be no repeat of this summer," von der Leyen said. "Far too often, national budgets become the insurer 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 meet the growing challenge posed by natural catastrophes, a commission spokesperson said. The alliance would be made up of insurers, experts, investors and regulators, they said.
Von der Leyen announced that the commission, the bloc's executive branch, would put forward a European Water Initiative to combat waste, adding that key rivers, like the
With around 90% of some rare earths currently coming from China, the EU would also establish a European Corporation on Critical Raw Materials to stockpile key elements for clean transition technologies and defense, von der Leyen said. She pledged to accelerate the shift away from climate-warming fossil fuels, which have soared in price after the Iran war impeded flows of oil and gas through the
"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."
