How do weather risks in Canada and the United States affect global commodity prices? Implications for the decarbonisation process
Date
2023
Authors
Lau, C.K.
Cai, Y.
Gozgor, G.
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Journal article
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Annals of Operations Research, online, 2023; online(2):1-17
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Abstract
Given that the probability of extreme weather has been dramatically increasing, this study contributes to the existing literature by bridging the relation between weather risks and global commodity prices with a secondary dataset (e.g., weather risks of Canada and the United States, agricultural raw materials price, gold price, and crude oil price). The results from the vector autoregression model and impulse response functions show that rising weather risks increase the price of agricultural raw materials and gold. However, the negative impact of weather risks on the crude oil price is found. Finally, the paper discusses the findings' potential implications (e.g., developing decarbonised supply chains) for decreasing weather risks' effects on commodity market uncertainties.
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Copyright 2023 The author(s). (http://creativecommons.org/licenses/by/4.0/)
Access Condition Notes: This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made