“Since the 1980s the number of registered weather-related loss events tripled, and the inflation-adjusted losses have increased fivefold. These trends are set to continue and could threaten assets worth 20 per cent of global GDP."
That's Canada's Prime Minister Mark Carney talking about climate risks in his 2021 book Value(s): Building a Better World for All.
I recently finished reading this 600-page book and it has been an eye opener on many levels, especially on weather, a space I last tracked at my gig on a currencies and commodities research desk in Mumbai from 2012 to 2014. Part of my job involved tracking natural gas prices, which take cues from weather forecasts and sometimes weather derivatives, more specifically options on heating degree days (HDD) and cooling degree days (CDD).
Back then, it struck me how broken, fragmented and little known these weather options were, leaving the bulk of the world’s population exposed to the financial devastation of weather and climate risks (not to mention the physical risks).
Omkar Godbole is a co-managing editor on CoinDesk’s Markets team.