Environmental insurance (EI) has been considered as an effective tool to strengthen environmental security worldwide. It allows for pooling resources for pro-active risk reduction measures and paying compensations for affected parties in case of damage occurred. Moreover, it provides incentives for cleaner and safer production.

In transition period, there has been a long debate on introducing insurance mechanisms into environmental protection system in the Russian Federation. A great deal of efforts has been invested into elaborating legal and regulatory framework for application of insurance to environmental risk management, preparing guidance on environmental risk assessment and pricing, and fostering practice of EI practice.

Despite existing legal provisions for applying insurance to cover environmental risks Russian EI system is still in the making and considerable effort is required for make insurance play adequate role in assuring environmental security. At the same time, there are a number of Russian regions which have gained considerable experience in introducing EI into regional system for environmental protection and management.

The current project explores opportunities to integrate environmental insurance into public environmental policies in Russian Federation. The research findings establish background for devising recommendations on fostering EI in a given Russian region (pilot project). Vologda Region is selected as a pilot region.

During the fellowship year it is planned to:

1. understand the current role of insurance in managing environmental risks related to industrial operations,



2. trace the development of the national EI system in Russia and analyze the current situation with EI implementation in the Russian Federation at national level and in selected regions advanced in EI development;



3. develop recommendations on EI promotion in a selected pilot region (Vologda Region);



4. write a research paper summarizing results of the research conducted and a policy paper on implementing EI into regional environmental policy for a pilot region.