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Argentina is a country exposed to many natural disasters such as earthquakes, severe storms, volcanic eruptions, and it is vulnerable to climatic changes.

In recent years, extreme climatic and ecosystem events have been observed more frequently and intensely in Argentina. Among other events, one finds droughts, frosts, floods, severe storms, hailstorms, and volcanic ash falls. Not only do adverse climatic events have a significant impact on different sectors of the economy and erode natural capital with long-term effects, but they also produce tax revenue losses and require public spending increases to address the emergency. This fiscal and social exposure to catastrophic climatic risks is what drives Argentina´s interest in the use of financial instruments for risk sharing.

Earthquakes have affected Argentina several times. In the past 150 years, three big quakes and several minor ones have produced casualties and material losses. The first struck in March 1861 in Mendoza city (capital of the province of Mendoza), the most important city in the west of the country, 1,100 kilometers west of Buenos Aires. This quake destroyed the city completely, killing more than 10,000 of 16,000 inhabitants. The losses were aggravated by the long time that elapsed between the event and the arrival of relief. The city was rebuilt in a new location, near the original city. The new design improved the city's capacity to endure new earthquakes. However, the city grew much larger than it was in 19th century, now occupying the site of the destroyed city. The second great quake was in January 1944, affecting San Juan, provincial capital of San Juan province, 1,200 kilometers west of Buenos Aires, the second most important city in the west of the country. The quake completely destroyed the city and killed more than 10,000 people. It was rebuilt in the same place, using the most advanced seismic-resistant building techniques of the moment. Moreover, that event originated one of the most important nationwide organizations to study earthquakes, their genesis, and their consequences on buildings and infrastructure: the National Seismic Prevention Institute (Instituto Nacional de Prevención Sísmica, INPRES). The institute is responsible for enacting the National Seismic-Resistant Building Code (named INPRES CIRSOC [Centro de Investigación de los Reglamentos Nacionales de Seguridad para las Obras Civiles, or Research Center of National Regulations Security for Civil Works]) and overseeing its application on San Juan city, San Juan province, and national buildings. Years after the code was enacted, many provinces adopted it, adapted to their own needs. The third earthquake was in Caucete, in San Juan province, in November 1977, killing fewer than 100 people, but inflicting heavy material losses on productive facilities. None of these events limited its action to epicentral areas. Material damages were reported several kilometers away from epicenters in the aftermath of the 1861, 1944, and 1977 earthquakes. Many provinces delayed the adoption of the INPRES CIRSOC code until the 1980s. For that reason, thousands of houses built before the eighties are not seismic resistant at all and could be damaged because of nearby epicenters or because of elastic wave propagation originating in relatively distant epicenters.

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