Report from Guatemala: Can climate insurance help?

Drought, storms, floods – in the mountain villages of Guatemala it’s all about survival. Climate change has exacerbated the situation dramatically. Can so-called climate insurance help people?

Bernardo Díaz grew up in this area, he knows the villages, the mountains, the poverty. As a child, he sometimes accompanied his grandmother, who sold milk and eggs in neighboring mountain villages. But now he’s the one with the blue cap and the inscription of the “PMA”, the Spanish acronym for the World Food Program of the United Nations. The one with the white jeep and driver.

The journey goes to Lima, a mountain village close to the border with Honduras. Here he stands in the midst of women who do not know how to support their families in the coming weeks because the last hurricane shredded the crops and destroyed the houses.

Protection against climate damage

“As an individual, you sometimes feel powerless when you face all these needs,” says Díaz. “Nevertheless, it’s good to be able to help at least a little bit to mitigate the effects of climate change – even if it’s just a small contribution.”

Díaz is just 23 years old, this is his first job, he’s fresh out of university. Together with the organization MiCRO, a start-up that designs climate insurance, he is trying to protect as many families as possible against climate damage.

The problems he encounters go far beyond insurance benefits. Sick old people who can’t be taken to the doctor for financial reasons, mothers who dry disposable diapers because they can’t afford new ones, and dangers everywhere.

Climate change takes last livelihood

Just a month ago, 19 people from a neighboring mountain village died in an accident while standing in a pickup truck and trying to drive to the next town to collect support from the World Food Program. A tragic accident on one of the muddy, pitted dirt roads on mountain slopes where there are no alternative modes of transportation.

The UN climate conference in Egypt will discuss how the international community can tackle climate change and what the industrialized nations, which are responsible for the world’s largest emissions, can do for the poorer countries that feel the consequences of climate change the most.

Here in the mountain villages of Guatemala, it has long been about pure survival. Climate change robs people of their last livelihood. In recent years, droughts and storms have become more frequent, either there is too little water or too much. “How are these smallholders supposed to live if they have no other means of survival? What do you have left?” asks Díaz.

Climate insurance in fashion

Climate insurance is in fashion right now. More and more countries are giving money: Finally, a very concrete solution that the rich countries can use to show that they take responsibility – even if they don’t want to say that they are actually responsible.

Here in this area of ​​Guatemala, since 2020, the EU, the Canadian government and the International Fund for Agricultural Development have allotted half a million dollars to develop and disseminate the insurance. Almost 10,000 people are now insured against climate damage, and next year it is expected to double that number.

If a hurricane hits the community and there is too much rain, the insured get money. This works via previously defined parameters that MiCRO develops with the help of satellite data.

Unbureaucratic help – in theory

For the mountain village of Lima, this means: As soon as more than 122 milliliters of rain falls within two days or as soon as no rain falls at all for more than 24 days within 60 days, the insurance company pays a fixed minimum amount. If more rain falls or the drought lasts longer, the sum increases.

The advantage: the payments are automated, within a few weeks the insured can pick up their money from the nearest bank, because there is no need to first draw up complex reports. One of the disadvantages: the amount paid out has nothing to do with the damage actually caused, and certainly not with the needs beyond that.

The other disadvantages: Just getting to the nearest bank is life-threatening and expensive. And sometimes it just doesn’t work with the notifications that should actually go to the insured person as an SMS – so that they don’t even know that they are now getting money.

“That’s enough for a month”

On the ground, nobody thinks climate insurance is a real solution, neither the World Food Program nor MiCRO, nor the insured. “Of course, the problem is much bigger,” says MiCRO’s Beatriz Vaca Dominguez. “The only thing that this insurance does is that people have enough food for 15 days to two months or, in the best case, can even make up for their losses.”

Delfina now gets the equivalent of 19 euros from the insurance. “I think that’s enough for a month now, at least for the essentials,” says the 40-year-old. “After that we’ll figure out how to survive.” She stands on a mountainside amidst harvested corn plants and pulls a green bean bush out of the ground. “The plant can no longer grow, it has no more roots”. Their harvest is almost completely destroyed. She won’t be able to sow again until June next year.

Fear that things will get worse

Bernardo Diáz would like to change many things, starting with the dangerous roads. “We are now looking for alternatives for the payments – but we are still looking for the safest possible way”. But even then, the lack of health care, lack of education and malnutrition remain.

Here in the mountain villages of Guatemala, climate insurance remains a drop in the ocean. The politicians at the world climate summit must make that clear, says Beatriz Vaca Dominguez – and act urgently. “I don’t have much hope,” she says through tears. “I hope that everyone starts to tackle now. What you see here is: either something is moving now, or… it’s getting worse and worse.”

You can see this and other reports in Weltspiegel – on Sunday at 6.30 p.m. in the first.