Little, L. Richard; Hobday, Alistair J.; Parslow, John; Davies, Campbell R.; Grafton, R. Quentin
Climate adaptation requires large capital investments that could be provided not only by traditional sources like governments and banks, but also by derivatives markets. Such markets would allow two parties with different tolerances and expectations about climate risks to transact for their mutual benefit and, in so doing, finance climate adaptation. Here we calculate the price of a derivative called a European put option, based on future sea surface temperature (SST) in Tasmania, Australia,...[Show more]
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