BRUSSELS — EU governments should be forced to pay toward a climate change fund that can be tapped to rebuild infrastructure after natural disasters, with countries’ contributions weighted based on how exposed they are to extreme weather events.
That’s the conclusion of a new report published Wednesday by two heavy-hitting European institutions, both of which are increasingly concerned that such losses could end up devastating the financial system too, as climate change overwhelms traditional ways of providing insurance.
The mandatory reconstruction fund should be developed at a bloc-wide level, the European Central Bank said in a joint paper with the European Insurance and Occupational Pensions Authority, with countries’ contributions dependent on how geographically exposed they are to natural catastrophes, and payouts conditional on implementing reforms to better protect against climate risks.
The proposal “is meant as a basis for discussion,” the EU institutions said, adding that any such system would need to be decided at a political level.
