Mastering climate change has been recognised as a major challenge for the current decade. Besides the physical risks of climate change, the accompanying economic risks are substantial. Carbon Finance: A Risk Management View provides an in-depth analysis of how climate change will affect all aspects of financial markets and how mathematical and statistical methods can be used to analyse, model and manage the ensuing financial risks. There is a focus on the transition risk (termed carbon risk), but also a discussion of the impact of physical risks (as these risks are closely entangled) on the way to low carbon economies. This is a valuable overview for readers seeking an analysis of carbon risks from the perspective of financial risk management, utilising quantitative risk management tools.
With a simple approach accessible to a wide audience, this book aims for the heart of mathematical finance: the fundamental formula of arbitrage pricing theory. This method of pricing discounts everything and takes expected values under the equivalent martingale measure. The authors approach is simple and excludes unnecessary proofs of measure-theoretic probability, instead, it favors techniques and examples of proven interest to financial practitioners.
Mastering climate change has been recognised as a major challenge for the current decade. Besides the physical risks of climate change, the accompanying economic risks are substantial. Carbon Finance: A Risk Management View provides an in-depth analysis of how climate change will affect all aspects of financial markets and how mathematical and statistical methods can be used to analyse, model and manage the ensuing financial risks. There is a focus on the transition risk (termed carbon risk), but also a discussion of the impact of physical risks (as these risks are closely entangled) on the way to low carbon economies. This is a valuable overview for readers seeking an analysis of carbon risks from the perspective of financial risk management, utilising quantitative risk management tools.
With a simple approach accessible to a wide audience, this book aims for the heart of mathematical finance: the fundamental formula of arbitrage pricing theory. This method of pricing discounts everything and takes expected values under the equivalent martingale measure. The authors approach is simple and excludes unnecessary proofs of measure-theoretic probability, instead, it favors techniques and examples of proven interest to financial practitioners.
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