Changing insurance governance for positive hydropower
The climate problem presents humans with a threat unlike any other in human history. In order to combat it,there must be a quick transition from fossil fuels to renewable energy sources to cut back on emissions that trap heat. There must also be guard against endangering local populations, wiping out more ecosystems, and destroying nature altogether.
Using the force of a flowing river to generate electricity for human civilizations is known as hydropower, and it is at the center of this crucial argument.
Hydropower has long been the leading source of steady, low-carbon electricity for towns and nations around the globe, but it has come at a heavy cost to rivers and the people and animals that depend on them.
The world cannot afford to given the rapid reduction of freshwater species and the mounting strain that pollution and drought are placing on rivers.
It cannot be afforded to build any of the thousands of high-impact hydropower projects that will destroy nature and are still in the planning stages, from the Amazon River in South America to the Zambezi River in southeast Africa. Freshwater species are in steep decline, and rivers are under constant pressure from pollution and drought.
And the insurance industry has a crucial role to play. With the help of the UN Environment Program's Principles for Sustainable Insurance, WWF has released this groundbreaking guide, "Insuring a nature-positive world: An insurer's guide to hydropower."
How insurance firms may aid with river protection
As risk managers, insurers, and investors, insurance companies promote the development of hydropower projects in each of these three capacities. Infrastructure projects including hydropower are difficult and expensive. Most of the time, private businesses won't work on new hydropower projects without insurance coverage, and private investors will demand that the right insurance is in place before making an investment.
Therefore, insurers are crucial to the hydropower industry's success, and their backing will be essential in thwarting hazardous hydropower projects and addressing the environmental crisis.
The manual outlines seven essential steps that insurers can take:
1. By giving preference to renewable energy projects that are a part of an integrated, system-wide renewable energy plan, you may aid in the transition to low-carbon, low-cost, and low-conflict energy.
2. For the purpose of financing and making investments in hydropower, develop a company environmental, social, and governance policy.
3. Reject funding for hydropower developments inside of protected areas.
4. require hydropower projects to conduct a credible, independent assessment of their social and environmental impacts.
5. impose strict guidelines and requirements on hydropower project development.
6. Set a maximum threshold and demand computations of a project's greenhouse gas emissions.
7. Consider hydropower as a potential contentious activity in making investment decisions.
These actions will help insurers stop high-impact hydropower and protect important rivers for both humans and the environment.
Healthy, free-flowing rivers have a variety of positive effects on economies and societies, including reducing flood risks for urban areas, preserving freshwater fisheries that feed hundreds of millions of people, nourishing floodplain fields, and preventing densely populated deltas from being submerged by rising seas. They also have one of the highest levels of biodiversity on the globe and are essential to the survival of a huge number of freshwater, terrestrial, and marine species.
However, about one-third of long rivers still flow freely, and the majority of these are threatened by planned, highly disruptive hydropower.
If these projects move forward, they would hasten the extinction of freshwater biodiversity and thwart efforts to provide a future that is kind to nature. Since 1970, we have already lost 84 % of the populations of freshwater species.
It is the most obvious indication of the harm we have done to the wetlands, lakes, and rivers that support our communities.
Fortunately, by investing in the appropriate renewables in the right areas, we may now achieve global climate and energy targets without contributing to more nature loss, surrendering the remaining free-flowing rivers in the world, or harming communities.
A net-zero, environmentally friendly future is now feasible because of the revolution in renewable energy, which is being fueled by battery technology advancements and the falling cost of solar and wind power. Power grids that are low-cost, low-conflict, and high-carbon can now be built by nations.
Low impact hydropower has a part to play, including off-river pumped storage and repairing and retrofitting older dams. But the era of large- and small-scale hydropower with high impacts must end.
Using hydropower is a risky venture. It is becoming a riskier industry as a result of the climate issue as severe floods and droughts endanger electricity production and the security of dams along an expanding number of rivers. In fact, a study utilizing scenarios from WWF'sWater Risk Filter revealed that by 2050, 61% of current and future hydroelectric plants will be located in river basins with a high risk of flooding, droughts, or both.
The goal of WWF is to begin collaborating with the insurance industry to increase awareness of the dangers involved with hydropower and the necessity of applying very strict screening to hydropower projects in order to disfavor and deter the high-impact ones.
Even though we acknowledge that governments bear the most of the blame, everyone—including insurance companies—can assist speed up the transition to renewable energy, which will stabilize the climate and increase biodiversity.
Even if investments in renewable energies are currently still considered to be financially costly, responsibles within a global society are committed to implementing sustainable energies and turn away from fossil fuels, provide education on what their continued use means for our planet and how we can prepare for the turnaround. More information: https://www.worldwildlife.org/stories/how-insurers-play-a-key-role-in-combating-harmful-hydropower