Although public awareness of this climatic phenomenon may be recent, the “El Niño” effect is hardly new. It is said that fishermen off the coast of South America had identified it as early as the 1600s. The NOAA has been able to establish past ENSO events as far back as 1897 based on a Multivariate ENSO Index.
Fortunately, Peruvian authorities are also seeking to find better, long-term strategies for coping with climate-related disasters. In 2011, under the auspices of the German Society for International Cooperation (GIZ gMBh), the Peruvian insurance regulatory authority and the Peruvian Ministries of Economy and Finance, Environment, and Agriculture organized a workshop to discuss “Insurance Solutions for Adaptation to Climate Change for the Public, Productive and Financial Sectors.”
Unlike traditional insurance, which pays out only when damage has occurred, this type of protection uses an index specified in the policy -such as the amount of rainfall– as a payment trigger. Payment would be made irrespective of the actual damage, with which costly damage measurements can be avoided. The result is affordable coverage in reach of the poorer sections of the population. This is not a comprehensive solution to all, and there are even legal issues to address, but it is an interesting starting point.