Climate Risk And The Weather Market

Provides a highly accessible and complete coverage of weather risk management as seen from the perspective of practitioners, consultants and academics.

This publication serves as a roadmap for exploring and managing climate risk in the U.S. financial system. It is the first major climate publication by a U.S. financial regulator. The central message is that U.S. financial regulators must recognize that climate change poses serious emerging risks to the U.S. financial system, and they should move urgently and decisively to measure, understand, and address these risks. Achieving this goal calls for strengthening regulators’ capabilities, expertise, and data and tools to better monitor, analyze, and quantify climate risks. It calls for working closely with the private sector to ensure that financial institutions and market participants do the same. And it calls for policy and regulatory choices that are flexible, open-ended, and adaptable to new information about climate change and its risks, based on close and iterative dialogue with the private sector. At the same time, the financial community should not simply be reactive—it should provide solutions. Regulators should recognize that the financial system can itself be a catalyst for investments that accelerate economic resilience and the transition to a net-zero emissions economy. Financial innovations, in the form of new financial products, services, and technologies, can help the U.S. economy better manage climate risk and help channel more capital into technologies essential for the transition. https://doi.org/10.5281/zenodo.5247742

Originally published in 2005, Weather Derivative Valuation covers all the meteorological, statistical, financial and mathematical issues that arise in the pricing and risk management of weather derivatives. There are chapters on meteorological data and data cleaning, the modelling and pricing of single weather derivatives, the modelling and valuation of portfolios, the use of weather and seasonal forecasts in the pricing of weather derivatives, arbitrage pricing for weather derivatives, risk management, and the modelling of temperature, wind and precipitation. Specific issues covered in detail include the analysis of uncertainty in weather derivative pricing, time-series modelling of daily temperatures, the creation and use of probabilistic meteorological forecasts and the derivation of the weather derivative version of the Black-Scholes equation of mathematical finance. Written by consultants who work within the weather derivative industry, this book is packed with practical information and theoretical insight into the world of weather derivative pricing.

Originally published in 1986, this book discusses the value of weather and climate information in government and business decision-making. It issues a strong manifesto for the development of new areas of research requiring the skills of weather scientists, geographers, economists, planners and political scientists. It offers a coherent and non-technical presentation of this climatology, supported with practical guidance on assessing the impacts of weather and climate on human affairs.

Climate change poses an unprecedented challenge to the world economy and the global financial system. This paper sets out to understand and quantify the impact of climate mitigation, with a focus on climate-related news, which represents an important information source that investors use to revise their subjective assessments of climate risks. Using full-text data from Financial Times from January 2005 to March 2022, we develop machine learning-based indicators to measure risks from climate mitigation, and the direction of the risk is identified through manual labels. The documented risk premium indicates that climate mitigation news has been partially priced in the Canadian stock market. More specifically, stock prices react positively to market-wide climate-favorable news but they do not react negatively to climate-unfavorable news. The results are robust to different model specifications and across equity markets.

Based on an International Workshop held in New Delhi, India, this work should be of interest to all organizations and agencies interested in improved risk management in agriculture. In many parts of the world, weather and climate are one of the biggest production risks and uncertainty factors impacting on agricultural systems performance and management. Both structural and non-structural measures can be used to reduce the impacts of the variability (including extremes) of climate resources on crop production.

The positive effects of climate change on the market Record-setting snowfall, cyclones in Australia, chronic drought in Russia, and other dramatic weather events are getting increased attention from scientists and the general public. The effects of climate change present challenges to many sectors, but also present major investing opportunities in the stock, bond, and futures markets. Extreme Weather and The Financial Markets looks at climate change from an investor's standpoint. The climate change debate is somewhat irrelevant to those in the financial industry, since we already live with more than enough extreme climate events to impact the financial markets. To the extent that environmental scientists are correct and global climate change is real and getting worse, the more investment opportunities we have The book presents investment ideas that will work under today's global climate condition and will become even more lucrative if global climate change continues Written by Larry Oxley, an acclaimed author who has personally outperformed the index in the Basic Materials sectors (i.e. chemicals, metals, mining, and forest products) for each of the last five years—in both good and bad markets and throughout the global recession—in a portfolio of nearly $2 billion Focusing on the investment opportunities during dramatic weather events, Extreme Weather and The Financial Markets offers advice on how to capitalize on global climate change.

Water risks, including the lack of access to fresh water for personal and industrial use, droughts, floods, and water contamination, are problems that are not new, yet, they are amplifying in the face of climate change, population growth, and rapid economic development. Properly identifying, measuring, and managing these risks as well as taking advantage of related mitigation opportunities is essential for the future well-being of firms across various industries, investors who invest in these firms, local and federal governments, and ultimately our society as a whole. This edited book sheds light on this topic by examining the unique measurement and modelling challenges associated with either the scarcity or overabundance of water and their interaction with finance and society. Specifically, it explores approaches to assess and operationalize water risk, examines the vulnerability of institutions and markets, and discusses strategies for risk mitigation.