Climate Resiliency Rating Scale for Developments to Guide Interest Rates and Insurance Premiums
A Climate-Resilient Marine Spatial Plan will guide the protection and sustainable use of the Virgin Islands’ marine environment. It will define key zones for conservation, fisheries, recreation, and development—supporting climate resilience while enabling a balanced blue economy.
Introduction
Decisions on where and how to build significantly affect the exposure and risk profile of developments. Sliding scale insurance premiums and mortgage rates can be used to incentivise development in less vulnerable areas and using the most resilient building techniques.
For instance, owners would benefit from lower interest rates and insurance premiums for choosing to build away from flood-prone zones and low-lying coastlines and with the most resilient roof designs and hurricane shutters.
Standardised evidence-based guidance is needed to govern such an incentive scheme to ensure economic viability, parity and effectiveness in achieving desired outcomes.
The Impact
This project will engage experts to develop a holistic Climate Resiliency Rating Scale (CRRS) for developments which takes into account the location, design and structural integrity of developments.
The CRRS will be supported by a standard Assessment Protocol for industry professionals to rate developments. The project will also deliver training on application of the CRRS and Assessment Protocol to the design community, appraisal community, banking and insurance sector and relevant government agencies and statutory bodies.
A key project output will be recommended standard adjustments to interest rates and insurance premiums based on the Climate Resiliency Rating of developments.
The Problem
A single interest rate and insurance premium being applied to a highly vulnerable home and to a climate-resilient home
The Solution
Climate resiliency rating scale (basic graph with X axis labelled “Number of buildings” and the Y axis labelled “Climate Resiliency Rating”)
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