Abstract
The impact of ongoing climate change on crop yields has left farmers with few short-term options to hedge against changes in temperature. To address this issue, the present study investigated the viability of using weather derivatives and smart contracts to hedge crop yields. Specifically, call options were priced to hedge against excess temperature for three Brazilian cities. Additionally, a distributed application using blockchain technology was developed, which allows individuals and farmers to negotiate these financial instruments. The findings suggest that blockchain technology can provide a low-cost infrastructure to develop financial instruments that can be used to hedge weather-related losses. The cost of providing this platform has been estimated to be less than 300 USD, making it particularly useful for farmers in developing countries. Furthermore, this study provides a comprehensive guide for the development of financial solutions using smart contracts to mitigate the impacts of climate change.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callSimilar Papers
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
