Green economy, climate insurance and a loss and damage fund
The transition to a green economy in Portugal involves updating fiscal, regulatory and financial instruments to integrate environmental objectives into the economy. This framework aligns with the Green Taxation principles established in 2014. National economic analyses indicate that climate risks significantly impact macroeconomic variables, including productivity in agriculture, tourism, energy and infrastructure, as well as public finances. Integrating these risks into projections helps assess the impact of droughts, floods and wildfires. Furthermore, green budgeting practices and the use of climate scenarios enhance the accuracy of financial estimates regarding GDP and inflation. In terms of risk management, the text highlights the importance of financial mechanisms such as a loss and damage fund and catastrophe bonds to manage climate-related volatility. The insurance sector also faces challenges, with public-private partnerships emerging as a solution to maintain coverage in high-risk areas. Ultimately, aligning economic reform with climate risk planning is essential for Portugal's resilience and competitiveness, despite the distractions of global conflicts.
