The Geographical Circulation of Weather: atmospheric sciences, weather derivatives and the commodification of the future

• Grant number: 22/07420-4
• Support Opportunities: Scholarships in Brazil - Master
• Start date: March 01, 2023
• End date: January 31, 2025
• Field of knowledge: Humanities - Geography - Human Geography
• Principal Investigator: Manoel Fernandes de Sousa Neto
• Grantee: Fernando Molnar Castro
• Host Institution: Faculdade de Filosofia, Letras e Ciências Humanas (FFLCH). Universidade de São Paulo (USP). São Paulo , SP, Brazil

Abstract

This research aims to investigate the inextricable relationship between the circulation of capital and atmospheric sciences. Some sectors of the economy have always suffered climate-related losses, but the current climate change scenario has brought new constraints to the market. Extreme weather events, such as rains, droughts, blizzards, floods, hurricanes, are increasingly intense and frequent, and harm agricultural production, cause material damage that decrease the profits of insurance companys, affect the sale of alcoholic beverages, the food retail market, construction and even the theme parks ticket office. Faced with this scenario of uncertainties regarding profit, companies in the energy sector created weather derivatives to try to mitigate the risks associated with increasingly rigid summers and winters. Derivatives were quickly negotiated in different sectors of the economy, with substantial changes in their way of operating and possible applications. These transformations of climate derivatives occurred parallel to the expansion of atmospheric sciences and their technologies in the face of debates about the impacts of climate change. Thus, this research aims to investigate how the market incorporated atmospheric sciences for the formulation of weather derivatives, and the subsequent transformations of these instruments for the diversification and expansion of contracts.