Impact investment in adaptation to climate related disasters
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Abstract

Assessing the need for parametric insurance instruments in Africa. The proliferation of early warning systems in Africa is indicative of a political will across the continent to better understand and manage climate change risk. The vast majority of Africa’s least developed countries recognized investment in early warning systems as a key priority in their National Adaptation Programmes of Action (NAPAs) and the current development of their National Adaptation Plans (NAPs).  However, while these predictive weather models have been increasingly drawn on to inform food security governance across the continent, translating this into effective climate change adaptation services requires financing mechanisms that can be rapidly mobilized to respond to the early warning signals. Over the last ten years, African governments and development actors have demonstrated their commitment to the adoption of rapid response mechanisms to address adaptation challenges on the continent. This rapid response is crucial in an African context, where significantly limited insurance penetration and the lack of household-level safety nets such as personal savings or national relief funds increase vulnerability to climate change-induced shocks. With over 95 percent of African food production reliant on rainfed agriculture, the introduction of financing mechanisms that can be rapidly deployed are essential to safeguarding food security on the continent. Agricultural households should be provided with adaptation strategies before negative coping mechanisms - such as selling agricultural assets, skipping meals, or withdrawing children from school3 are deployed, thereby safeguarding. Development gains made in productive years.