Enhancing environmental sustainability: how insurance and digital government minimize climate risks

Insurance and digital government can play important roles in reducing climate risk by strengthening financial protection and improving the efficiency of disaster management. However, evidence on the insurance–digital government–climate risk nexus remains limited and inconclusive. This research gap motivates the present study to examine whether insurance and digital government can serve as effective tools for climate risk mitigation. Therefore, this study examines the effects of insurance and digital government on climate risk across 84 global economies over 2003–2022 using the MMQR approach. The results show that both life and non-life insurance significantly help reduce climate risk at most levels. Likewise, digital government also helps reduce climate risk at all levels. Moreover, economic growth, government spending, and trade openness also reduce climate risks across most quantiles. The results suggest that policymakers should strengthen climate insurance systems and accelerate digital governance to manage and reduce climate risks.