Doug Henwood wrote:
> "Global Warming and Financial Umbrellas"
>
> BY: MICHELE MORETTO
> University of Padova
> Department of Economics
> Fondazione Eni Enrico Mattei (FEEM)
> CESARE DOSI
> University of Padova
> Department of Economics
>
> Document: Available from the SSRN Electronic Paper Collection:
> http://papers.ssrn.com/paper.taf?abstract_id=291946
>
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>
> Paper ID: FEEM Working Paper No. 87.2001
> Date: October 2001
>
> Contact: MICHELE MORETTO
> Email: Mailto:moretto at decon.unipd.it
> Postal: University of Padova
> Department of Economics
> via Del Santo 33
> 35123 Padova, ITALY
> Phone: +39 049 8274265
> Fax: +39 049 8274211
> Co-Auth: CESARE DOSI
> Email: Mailto:dosi at decon.unipd.it
> Postal: University of Padova
> Department of Economics
> via Del Santo 33
> 35123 Padova, ITALY
>
> Paper Requests:
> Contact Publications Office, Fondazione Eni Enrico Mattei, Corso
> Magenta 63, 20123 Milan, Italy. Mailto:ranzini at feem.it or
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>
> ABSTRACT:
> A new instrument for hedging weather risks has made its
> appearance in the financial arena. Trade in 'weather
> derivatives' has taken off in the US, and interest is growing
> elsewhere. Whilst such contracts may be simply interpreted as a
> new tool for solving a historical problem, the question
> addressed in this paper is if, besides other factors, the
> appearance of weather derivatives is somehow related to
> anthropogenic climate change. Our tentative answer is positive.
> Since 'global warming' does not simply mean an increase in
> averaged temperatures, but increased climate variability, and
> increased frequency and magnitude of weather extremes,
> derivative contracts may potentially become a useful tool for
> hedging some weather risks, insofar as they may provide coverage
> at a lower cost than standard insurance schemes.
>
> Keywords: Global warming, climate variability, insurance
> coverage, weather derivatives