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Financing for heat action plans at city-level in Europe.
Over the course of three workshops, this Innovation Lab discussed use cases for trigger based financing for specific groups alongside a wider context of the use of NbS to manage city heat. A very wide range of use cases were identified, therefore a decision was taken to focus on only one. In the second and third workshops, the work drilled down to meeting the needs of rough sleepers in dangerously hot weather. The Lab also assessed the feasibility of applying NbS in urban green spaces.
The initial workshop revealed the diversity of vulnerable groups and the varied settings in which they might be found. Over a short project related timescale this made it difficult to develop a one size fits all approach to financing and estimating loss. Therefore a relatively simple use case for financing the needs of homeless people in extreme heat was piloted. A trigger based financing structure was developed.
Insurance professionals
Authorities
The Innovation Lab found that financing needs were eventually met by upper tier government organisations, albeit with a significant time lag, and so there was no need for an insurance-based solution;
Furthermore it was also demonstrated that any parametric solution would have significant data requirements. The costs for these could only be met if a multi agency heat response plan could identify sufficient residual risks which required financing at specific temperature thresholds;
If city managers were to consider a range of adverse impacts of heat, it is highly likely that insurance based risk financing would offer value for money and be able to cover the costs of sourcing data.
Presentations: Urban heatwaves: establishing risk financing strategies for emergency response plans and nature-based risk reduction measures (November 2024, February 2025).
Policy and finance brief: Risk transfer and reduction through Nature-based Solutions.