A state-owned insurance major in China has launched the country’s first forest biodiversity insurance that provides compensation for environmental damage, targeting a region in Zhejiang province’s Ningbo city.
A local branch of the People’s Insurance Company Group of China (PICC) has signed an insurance policy with the government of Longguan township to protect biodiversity and better cope with the environmental challenges, with compensation of up to 2 million yuan ($275,978) available to compensate for losses, according to a statement recently released by the local government.
The insurance policy covers biodiversity damage caused through various sources, including natural disasters, the invasion of alien species, attacks of wild animals, and the destruction of vegetation.
PICC will also pay for the losses caused by human activities such as project construction, sewage and garbage pollution, and pesticide residues in the area, the statement said.
“In the event of an accident, PICC’s Ningbo branch will use drones to monitor the loss, investigate the loss with the township government, and pay the compensation in place as soon as possible after the disaster, so as to gain valuable time for post-disaster loss reduction and ecological restoration,” it said.
Longguan township is based in Ningbo’s Haishu district, a national ecological demonstration area, which has a forest coverage rate of nearly 50% and around 2,200 biological species in the Siming Mountain area.
Longguan attracts more than 1 mln tourists annually and its thriving tourism industry brings opportunities “for the integration of tourism and biodiversity conservation”, making it an ideal location for the country’s first biodiversity insurance policy, according to the China Daily newspaper.
The insurer has also said it will continue working on similar products linked to biodiversity protection and assist the local government to apply for domestically-issued carbon offsets, known as China Certified Emission Reductions (CCERs).
Similarly, PICC earlier this year signed an insurance policy for nearly 500,000 acres of forest in Yantai city in Shandong province, with a coverage of 51.71 mln yuan as a tool to protect nature-based carbon sinks in the region.
Some Chinese insurers have also expressed their interest in developing insurance products that can contribute to nature protection and restoration, including a local branch of China United Insurance, which inked a policy that provides 16.8 mln yuan worth of coverage to protect around 280,000 mu (46,126 acres) of public forest in Shandong’s Zibo city.
The concept of “insuring nature” is still in its infancy, although it has been adopted to help preserve coral reefs.
Conservation group the Nature Conservancy (TNC) has taken out a $2 mln insurance policy for Hawaii’s coral reefs, the first of its kind in the US, ensuring that reefs in the region can be restored if damaged by major storms.
TNC has also teamed up with reinsurer Swiss Re and regional governments in Mexico to help protect and preserve the coral reef off the coast of the Yucatan Peninsula through the implementation of an insurance solution in 2017.
By Chia-Erh Kuo – chia-erh@carbon-pulse.com
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