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Water Shortage and Mitigation Solutions: A Focus on New Physical and Financial Hedging Tools.

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Název: Water Shortage and Mitigation Solutions: A Focus on New Physical and Financial Hedging Tools.
Autoři: Bartolini, Nicola1 (AUTHOR), Romagnoli, Silvia1 (AUTHOR) silvia.romagnoli@unibo.it, Santini, Amia1 (AUTHOR)
Zdroj: Journal of Futures Markets. Oct2025, Vol. 45 Issue 10, p1491-1511. 21p.
Témata: *HEDGING (Finance), *FINANCIAL instruments, *FARM risks, WATER shortages, DROUGHT management, WATER efficiency, CLIMATE change
Geografický termín: CALIFORNIA
Abstrakt: Climate change, water mismanagement, and overconsumption are intensifying droughts and water shortages worldwide. Beyond health risks, water scarcity threatens food security, disrupts agriculture, and can fuel conflicts—underscoring the need for sustainable water management. This paper proposes a financial strategy using weather derivatives tied to water indexes or variables like rainfall to hedge against volumetric risks. Through a case study of California's water market, and a sensitivity analysis based on climate change scenarios, we show how these tools can mitigate the impact of water scarcity, particularly in agriculture, and help bridge the climate risk insurance gap. [ABSTRACT FROM AUTHOR]
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Databáze: Business Source Index
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Abstrakt:Climate change, water mismanagement, and overconsumption are intensifying droughts and water shortages worldwide. Beyond health risks, water scarcity threatens food security, disrupts agriculture, and can fuel conflicts—underscoring the need for sustainable water management. This paper proposes a financial strategy using weather derivatives tied to water indexes or variables like rainfall to hedge against volumetric risks. Through a case study of California's water market, and a sensitivity analysis based on climate change scenarios, we show how these tools can mitigate the impact of water scarcity, particularly in agriculture, and help bridge the climate risk insurance gap. [ABSTRACT FROM AUTHOR]
ISSN:02707314
DOI:10.1002/fut.70000