Water Shortage and Mitigation Solutions: A Focus on New Physical and Financial Hedging Tools
研究提出利用与降雨等水指数挂钩的天气衍生品来对冲水量风险，通过加州水市场案例和气候变化情景敏感性分析，展示这些工具如何缓解农业用水短缺并填补气候风险保险缺口。
ABSTRACT 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.