Use of subsidized insurance policy in climate adaptation strategies: the case of pastoral regions in China

Insurance plays an important role in building rural livelihood resilience, in the context of climate change. Existing research examines the factors influencing insurance uptake and the effects of insurance adoption on informal risk-sharing strategies. This study, however, argues that insurance is an external policy intervention being introduced into a diversity of rural community adaptation strategies that are crucial components of resilient livelihood development. In this context, this study focuses on the case of subsidized livestock insurance in Tibetan pastoral regions with pooled cross-sectional data spanning three distinct time periods to explore how formal subsidized livestock insurance interacts with the diversity of adaptation strategies. Our findings first revealed a rising trend in subsidized livestock insurance adoption, accompanied by increased utilization of various on-pastoralism strategies, including custom-based and market-based approaches, and off-pastoralism strategies, such as increasing income sources. Second, our studies found a significant positive correlation between livestock insurance and the diversity index of market-based and off-pastoralism adaptation strategies, indicating a more complementary relationship. In addition, our studies discovered that the introduction of livestock insurance does not have an obvious correlation with custom-based strategies, dismissing the concerns of the potential displacement of informal custom-based adaptation strategies by subsidized livestock insurance. These results highlight that the subsidized livestock insurance policy is among many other adaptation strategies that rural communities have applied to respond to climate changes and build resilient livelihoods.Government-subsidized livestock insurance is an effective strategy for adaptation to climate change in pastoral areas, covering the high losses of pastoralists after a weather-related disaster and helping them recover.In Tibetan pastoral regions there is a positive relationship between livestock insurance on the one hand, and a diversity of market-based and off-pastoralism adaptation strategies on the other.Livestock insurance, a government policy-driven adaptation strategy, has become part of the diverse adaptation strategies that herders have implemented to respond to climate change.