Adaptation and catastrophe insurance

Alex Y. Lo () and Chen Xiang ()

Chapter 7 in China's Climate Policy, 2025, pp 123-149 from Edward Elgar Publishing

Abstract: China's national climate change strategy is skewed toward GHG mitigation. Despite supporting the energy transition effectively, China's green financial infrastructure has yet to demonstrate a transformative potential for reducing the adaptation funding gap. Adaptation-related expenditure has shown a modest growth, but become a smaller fraction of a much larger national budget in recent years. This can be understood as a retreat of government from directly funding climate change programs within the country. Nonetheless, major national adaptation initiatives, such as the catastrophe insurance system, remain predominantly publicly funded. Attempts to mobilize private capital have met with poor policy designs, weak incentives for investment, and persisting hierarchical controls. The difficulties in attracting private investments have created perverse conditions for state-centric arrangements. Consequently, climate change adaptation continues to be organized as a public service. This differs from the mixed delivery mode of low-carbon development in China, which has benefited from a few strategically important industries for GHG mitigation.

Keywords: Climate change adaptation; Adaptation finance; Government budget; Catastrophe insurance; Natural disaster; Private capital (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035341252
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