As Dr Johnson might have said: when a country knows its economy is to be wrecked in a fortnight, it concentrates the mind wonderfully. Reports over the past few days show that a number of minds have been deep in concentration over the climatic catastrophe known as El Nino.
Economists at Columbia University, New York, are, as one might expect, taking a fiscal view of the problem. They have developed what they call a "Catastrophe Bundle" to help countries are firms reduce their financial exposure to crop losses, floods and hurricanes. "Instead of wringing your hands and asking the World Bank for help, countries would be able to take a market position to hedge against El Nino," said Graciela Chichilnisky of Columbia's Earth Institute. The new idea is to link insurance cover with "catastrophe bonds" that pay investors lower returns in non-El-Nino years.
Meanwhile, in Polynesia, French scientists have discovered records of previous El Nino effects by drilling deep into coral, where historical water temperatures can be read like the rings on a tree. They hope it will lead to better predictions of the scale of future disasters.Reuse content