A Major Threat Of An Economy Comes From Climate Change

The evidence of climate change in Kenya is undeniable, while its effects on economic growth are no more mysterious; rather, they are rapidly unfolding to a startling reality and concern for humanity. Accelerated emissions of green house gases (GHGs) globally, from combustion of fossil fuels and unsustainable land use practices is the key driver of anthropogenic climate change, which is manifested in; temperature variations, frequent and extensive droughts, intensive rainfalls and floods, seasonal and regional pest and disease prevalence that result to conflicts for pasture and water resources,

What elements of the business (examples: revenues, investment needs, etc.) might be affected by weather risk or environmental liability, and how?

The presentation was scheduled for the first week of December 1990. Mr. Pross outlined the use of various derivatives, noting that they differed widely in their ability to reduce risk. If the company was, say, placing a large bid to buy a building abroad, one might prefer to use foreign currency options to hedge the currency risk in the event the deal fell through. He argued, however, that foreign currency futures were best suited to hedge the fluctuations in revenues arising from currency movements. Mr. Pross proposed a plan to hedge currency risk using futures which

In his speech at the 2016 Oscars, Leonardo DiCaprio declared that climate change is the planet’s most severe threat and encouraged his audience to “work collectively together and stop procrastinating” about the issue (Mooney). That seems ironic coming from the guy who played Jack, a character that drowned because of a giant iceberg, but I guess Leo understands the titanic effect climate change is having on the world. So what exactly is climate change? Climate change consists of variations in the average weather patterns of a region. This is mainly caused by a layer of greenhouse gases, like carbon dioxide, that blanket the atmosphere, trapping heat on earth’s surface. NASA reported that global temperatures have risen 1.4 degrees Fahrenheit

Climate is an average weather condition during a region in a given period, it will not change by one day or one night, but instead caused through over time. From the perspective of meteorology, The climate change refers to a specific location, time of regional or global climate change or conversion, based on the all of the conditions associated with the average weather characteristics, such as temperature, wind and precipitation etc. According to the IPCC’s Synthesis Report, “Anthropogenic greenhouse gas emissions have increased since the pre-industrial era, driven largely by economic and population growth, and are now higher than ever. This has led to atmospheric concentrations of carbon dioxide, methane and nitrous oxide that are unprecedented in at least the last 800,000 years. Their effects, together with those of other anthropogenic drivers, have been detected throughout the climate system and are extremely likely to have been the dominant cause of the observed warming since the mid-20th century” (Page4) Human are the main reason to cause the climate change. While during the climate changing in naturally, human activities have altered the chemical composition of the atmosphere, causing the today’s climate change. And this change is not only hindering the progress and development of society but also affect human society and the survival of

“Climate change is not just a distant future threat. It is the main driver behind rising humanitarian needs and we are seeing its impact.”

Climate change is an environmental and business issue that has gained more and more attention from society nowadays. The meaning of it seems to be not as easy as its name indicates which is merely a difference in climate. NASA (2011) reports, “Climate change, therefore, is a change in the typical or average weather of a region or city… Climate change is also a change in Earth 's overall climate. This could be a change in Earth 's average temperature, for example.” Therefore, climate change in our world has various effects in our life, which, for example, like extreme weather, global warming, higher sea-level and etc., do really affect our daily life and production process. Understanding what the climate change is, and why these changes occur so frequently and obviously in recent decades is of essential importance, not only for our economy, but also for society. This paper is going to introduce how this issue links to the business world from several dimensions. In the following paragraphs, the paper will demonstrate the complex relations between climate change and business by exploring on: first, the interaction between business and climate change with a brief stakeholder analysis; second, analyzing the business debates underpinning this issue consisting of stakeholders/shareholders debates and long term/short term debates and the way how business, and other stakeholders address the issue; third, figuring out potential solutions to address the issue and its obstacles.

creations of the Earth and we are beginning to take over that role partly because of our

w how transactions in derivative instruments can be used to either hedge risks or to open speculative positions.

In 1984, Financial Accounting Standards no. 80, Accounting for Futures Contracts, also known as FAS 80 had become effective. This document included all hedge accounting practices for entities in the United States. But FAS 80 had several faults. One of its faults was that it was bounded to exchange-traded futures and options and not to over the counter (OTC) derivatives. In 1999, FAS 80 was replaced by Financial Accounting Standards no.133, Accounting for derivative instruments and hedging activities. Despite, the numerous amendments, clarifications and interpretations this document had over the years, it still remains at the core of current derivatives accounting practices. This essay tends to provide a definition of a derivative, its characteristics

Derivatives are financial contracts whose price is either linked to the price of an underlying asset, commodity, rate, index or the occurrence or significance of a certain event. The phrase derivative originated from how the price of these contracts is derived from the price of some underlying commodity, security or index or the magnitude of an event. The set of financial instruments that include futures, forwards, options and swaps are referred to by the term Derivative. A derivative can be combined with a security or loan which will be then called a hybrid instrument or alternatively a structured security and structured financing. (Dodd, R., 2002).

ic: Show how transactions in derivative instruments can be used to either hedge risks or to open speculative positions.

It is estimated that about 75% of American companies use derivatives. The main risk remains that most companies do not monitor their position frequently (Operational) and only few really understand the instruments (Intellectual). Moreover, as an off-balance-sheet item it reduces the public awareness of such items (accounting).

Global warming is “The increase in Earth’s average surface temperature due to rising levels of greenhouse gases” (NASA). This issue is not a myth anymore, is affecting our economy, health and our future aggressively. The need to reduce pollutant emissions is now something urgent and an important commitment for all the nations. Natural disasters, virus and diseases are consequences of changes of temperature, the emissions of carbon gases weaken the ozone layer, water and food pollution.

There is a need of more innovation in Derivative Market because in today scenario even educated people also fear for investing in Derivative Market because of high risk involved in Derivatives.Derivative Type: