Hedging Climate Risk
提出一种简单的动态投资策略，让长期被动投资者在不牺牲财务回报的前提下对冲气候风险，并说明低碳指数可几乎消除跟踪误差，相当于持有“免费的碳期权”。
We present a simple dynamic investment strategy that allows long-term passive investors to hedge climate risk without sacrificing financial returns. We illustrate how the tracking error can be virtually eliminated even for a low-carbon index with 50% less carbon footprint than its benchmark. By investing in such a decarbonized index, investors in effect are holding a “free option on carbon.” As long as climate change mitigation actions are pending, the low-carbon index obtains the same return as the benchmark index; but once carbon dioxide emissions are priced, or expected to be priced, the low-carbon index should start to outperform the benchmark.