Background
Overview
This concept addresses the socio-economic vulnerability of informal workers to climate change impacts, explores innovative financial instruments for social protection, highlights gaps in existing welfare schemes, and discusses climate adaptation strategies for vulnerable populations. It is relevant for understanding social justice, environmental governance, and economic resilience.
Parametric insurance is an innovative financial instrument that provides payouts based on the occurrence of a pre-defined event or index (e.g., temperature, rainfall) rather than actual loss assessment. For vulnerable populations like informal workers, it offers a rapid, transparent mechanism to mitigate economic shocks and health risks arising from climate change impacts such as extreme heatwaves, thereby supplementing traditional social security measures.