Post by Sapphire Capital on Aug 14, 2008 21:35:58 GMT 4
Poverty Traps and Climate Risk: Limitations and Opportunities of Index-Based Risk Financing
Christopher B. Barrett
Cornell University - Department of Applied Economics and Management
Barry J. Barnett
University of Georgia - Department of Agricultural & Applied Economics
Michael R. Carter
University of Wisconsin - Madison - Department of Agricultural & Applied Economics
Sommarat Chantarat
Cornell University - Department of Economics
James W. Hansen
affiliation not provided to SSRN
Andrew G. Mude
Cornell University - Department of Economics
Daniel Osgood
Columbia University
Jerry R. Skees
University of Kentucky
Calum G. Turvey
Cornell University - Department of Applied Economics and Management
M. Neil Ward
affiliation not provided to SSRN
September 2007
IRI Technical Report No. 07-02
Abstract:
The objective of this paper is to frame the key issues and summarize the current state of knowledge about and innovations in index-based risk transfer products (IBRTPs) as they relate to the management of climate risk for poverty reduction, especially of chronic or persistent poverty. In the past several years, interest in and experimentation with weather index insurance and other IBRTPs has grown rapidly. Though no one should expect that these innovations alone can solve the problem of chronic poverty, index-based financing opens up a range of intriguing possibilities.
The remainder of this paper is comprised of five major sections that discuss:
1) how weather risks and climate shocks impact the poor in developing countries;
2) the concept of poverty traps, highlighting how conventional risk management strategies typically do not work well for managing covariate weather risk;
3) the limitations and opportunities of financial innovations using index-based risk transfer products (IBRTPs) for reducing or transferring weather risks and climate shocks;
4) a poverty traps-based typology of IBRTPs;
5) key remaining challenges in developing and implementing index-based risk financing for use in the global struggle to end chronic poverty.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1141933_code138510.pdf?abstractid=1141933&mirid=1
Christopher B. Barrett
Cornell University - Department of Applied Economics and Management
Barry J. Barnett
University of Georgia - Department of Agricultural & Applied Economics
Michael R. Carter
University of Wisconsin - Madison - Department of Agricultural & Applied Economics
Sommarat Chantarat
Cornell University - Department of Economics
James W. Hansen
affiliation not provided to SSRN
Andrew G. Mude
Cornell University - Department of Economics
Daniel Osgood
Columbia University
Jerry R. Skees
University of Kentucky
Calum G. Turvey
Cornell University - Department of Applied Economics and Management
M. Neil Ward
affiliation not provided to SSRN
September 2007
IRI Technical Report No. 07-02
Abstract:
The objective of this paper is to frame the key issues and summarize the current state of knowledge about and innovations in index-based risk transfer products (IBRTPs) as they relate to the management of climate risk for poverty reduction, especially of chronic or persistent poverty. In the past several years, interest in and experimentation with weather index insurance and other IBRTPs has grown rapidly. Though no one should expect that these innovations alone can solve the problem of chronic poverty, index-based financing opens up a range of intriguing possibilities.
The remainder of this paper is comprised of five major sections that discuss:
1) how weather risks and climate shocks impact the poor in developing countries;
2) the concept of poverty traps, highlighting how conventional risk management strategies typically do not work well for managing covariate weather risk;
3) the limitations and opportunities of financial innovations using index-based risk transfer products (IBRTPs) for reducing or transferring weather risks and climate shocks;
4) a poverty traps-based typology of IBRTPs;
5) key remaining challenges in developing and implementing index-based risk financing for use in the global struggle to end chronic poverty.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1141933_code138510.pdf?abstractid=1141933&mirid=1