Robert Engle shows us numerous strategies for constructing a climate hedge portfolio and their respective benefits. Robert then explores why it’s hard to hedge physical risks, the part of climate change most people worry about, and why the demand for oil and coal is going up.
Key learning objectives:
Learn how to construct climate hedge portfolios
Define the characteristics of a stranded asset portfolio and a factor mimicking portfolio
Understand why fossil fuel energy stocks are rising
Define why it’s difficult to hedge physical risks