That's just it -- financial engineering exists to make that risk something decomposited from particular economic activities.
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If I want a house in Florida but don't want climate risk and a pension fund is neutral on Florida but views risk as worth it...
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My first thought is "This suggests Serious People believe in their hear of wallets there is negligible risk from climate change." Maybe not?
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I mean there are markets in things which clearly are there less for headging and more to extract money from Less Serious People (e.g. gold).
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USD/JPY futures. Commodity futures. Interest rate swaps. T bills. Term life insurance. I can go on *for a while*.
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you can even buy many different flavors of terrorism insurance if you have anxiety about biz in e.g. Israel, US.
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there is no generic instrument, because there is no generic risk, but tons of weather insurance over the counter
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So that part of the story I think I understand. Is there a barrier (or lack of demand?) to there being some sort of indexed product?
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@patio11@pmarca challenge in isolating#climate risks w/ 1 financial product is risks are numerous & heterogenouspic.twitter.com/tf2chKEDyW
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@patio11@pmarca available financial products incl weather derivatives, emission allowances, fossil-free indices, green ETFs &#greenbonds
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