Executive Summary

The trade-offs between affordability and insurability – or more generally between our current lifestyles and sustainable ones – become more difficult to solve. Because we have long since passed the point when a gradual and largely smooth transformation of the economy would still have been possible. Now, rapid action and thorough behavioural change are needed to achieve the Paris goals and keep the rise in temperature at 1.5C.  

But compromises are still possible to find to manage the transition: But they won’t be pain- or costless. The life of every individual and business will be impacted.  

For individuals, the way we consume, live and save has to change. While the onus to make the necessary changes falls on each and every individual, supporting policies and measures are indispensable.
o    Consumption: Make the green premium for climate friendly products disappear by high carbon prices  
o    Lifestyle: Influence behaviours by nudges and prices as well as by adequate infrastructure, from public transport to comprehensive climate impact information
o    Living places: Ensure risk-adequate prices to incentivize risk prevention and adaptation
o    Savings: Incentivize long-term savings by tax breaks and subsidies

For companies, a similar logic applies: Financing, investments and the way inputs – labour, suppliers, and materials – are used have to change. This requires public support and incentives, too:  
o    Borrowing: Reduce the uncertainty of investments through instruments like contracts of difference
o    Green investments: Make green investments profitable and scalable by subsidies  
o    Employees: Facilitate climate-related burdens by new forms of unemployment schemes
o    Supply chains: Enable the change to sustainable and secure supply chains by holistic risk management solutions
o    Materials: Overcome the cost argument by introducing quotas to establish a true circular economy

Solving these trade-offs and finding a new and better equilibrium require two decisive ingredients: insurers that disclose the real risks and incentivize sustainable behaviours and practices as well as public money that can accommodate the transition.

But in the end, mastering the climate crisis is not so much a question of politics and money but one of individual responsibility. An uninsurable world would be not only a world that failed to cope with climate change but also a metaphor for an ethical failure of each and every one, dodging her moral obligation to reduce emissions.