TY  - JOUR
AU  - Whalley,John
AU  - Yuan,Yufei
TI  - Global Financial Structure and Climate Change
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14888
PY  - 2009
Y2  - April 2009
UR  - http://www.nber.org/papers/w14888
L1  - http://www.nber.org/papers/w14888.pdf
N1  - Author contact info:
John Whalley
Department of Economics
Social Science Centre
University of Western Ontario
London, ON N6A 5C2
CANADA
Tel: 519/661-3509
Fax: 519/661-3666
E-Mail: jwhalley@uwo.ca

Yufei Yuan
Wang Yanan Institute for Studies in Economics
Economics Building A307
Xiamen University
Xiamen, Fujian, P.R.China, 361005 
E-Mail: yyuanwise@gmail.com
AB  - This paper analyzes the medium to long-term implications of global warming for the evolution of global financial structures. Stern (2007) and other related scientific literature reports that greenhouse gas emissions generated by human activities will very possibly lead to global temperature increase of 1-5 degrees C by 2050. This will cause a dramatic increase in global risks to human life. The response to this will be the seeking-out of financial innovation by major forms, primarily in the area of insurance, but also in the diversification of asset holdings. We suggest in this paper that, with modest climate changes of 1-2 degrees C, the global insurance market will expand dramatically. However, under more extreme climate change scenarios, the entire global financial structure will undergo major changes, with a re-focusing of major financial activity away from intermediation between borrowers and lenders and the facilitation of the accumulation of assets, and towards a focus on insurance arrangements and the diversification of risks associated with climate change.
ER  -