Related papers: Climate-Contingent Finance
Abstract: The rising global temperatures caused by climate change significantly impact energy consumption and electricity generation. Fluctuating temperatures and frequent extreme weather events disrupt energy production and consumption…
The response of precipitation extremes to climate change is considered using results from theory, modeling, and observations, with a focus on the physical factors that control the response. Observations and simulations with climate models…
Assessing climate risk and its potential impacts on our cities and economies is of fundamental importance. Extreme weather events, such as hurricanes, floods, and storm surges can lead to catastrophic damages. We propose a flexible approach…
The document discusses the financial climate risk in the context of the banking industry, emphasizing the need for a comprehensive understanding of climate change across different spatial and temporal scales. It highlights the challenges in…
We introduce Climate Change Valuation Adjustment (CCVA) to capture climate change impacts on CVA+FVA that are currently invisible assuming typical market practice. To discuss such impacts on CVA+FVA from changes to instantaneous hazard…
The agricultural sector is particularly susceptible to the impact of climate change. In this paper, I investigate how vulnerability to climate change affects U.S. farms' credit access, and demonstrates that such impact is unequally…
We have witnessed and experienced increasing compound extreme events resulting from simultaneous or sequential occurrence of multiple events in a changing climate. In addition to a growing demand for a clearer explanation of compound risks…
This paper addresses estimates of climate risk embedded within a bank credit portfolio. The proposed Climate Extended Risk Model (CERM) adapts well known credit risk models and makes it possible to calculate incremental credit losses on a…
The mitigation of climate change requires a fundamental transition of the energy system. Affordability, reliability and the reduction of greenhouse gas emissions constitute central but often conflicting targets for this energy transition.…
Extreme weather events stemming from climate change can cause significant damage and disruption to power systems. Failure to mitigate and adapt to climate change and its cascading effects can lead to short and long term issues. The profound…
We consider insurance derivatives depending on an external physical risk process, for example a temperature in a low dimensional climate model. We assume that this process is correlated with a tradable financial asset. We derive optimal…
Great socio-economic transitions see the demise of certain industries and the rise of others. The losers of the transition tend to deploy a variety of tactics to obstruct change. We develop a political-economy model of interest group…
Climate change and environmental concerns represent a global crisis accompanied by significant economic challenges. Regular international conferences held to address these issues, such as in the UK (2021) and Egypt (2022), spark debate…
The financial sector is increasingly concerned with the physical risks of climate change, but economic and financial impact representations are still developing, particularly for chronic risks. Mexico's Central Bank conducted a…
Damage cost curves -- relating the typical damage of a natural hazard to its physical magnitude -- represent an indispensable ingredient necessary for climate change impact assessments. Combining such curves with the occurrence probability…
Natural climate variability, captured through multiple initial condition ensembles, may be comparable to the variability caused by knowledge gaps in future emissions trajectories and in the physical science basis, especially at…
This article proposes a fundamental methodological shift in the modelling of policy interventions for sustainability transitions in order to account for complexity (e.g. self-reinforcing mechanism arising from multi-agent interactions) and…
Climate policy has become increasingly politicized in many countries including the US, with some political parties unwilling to pursue strong measures. Therefore, to be successful in mitigation, climate policies must be politically…
As urbanization and climate change progress, urban heat becomes a priority for climate adaptation efforts. High temperatures concentrated in urban heat can drive increased risk of heat-related death and illness as well as increased energy…
Modern weather and climate models share a common heritage, and often even components, however they are used in different ways to answer fundamentally different questions. As such, attempts to emulate them using machine learning should…