Events of climate change and impact of climate change Essay

Events of climate change and impact of climate change - Essay Example (2007) describes climate change as the statistically substantial variation in the mean condition of climate (p.145). Climate change has also been described by Maunder (1992, p. 34) as a change in climate ascribed directly or indirectly to human activity that changes the global atmospheric composition observed over a period. Ocean variability, solar radiation variations, plate tectonics, volcanic explosions, human activities and orbital variations cause climate change. Oceans are vital and critical elements of the climate system (Christopherson, 1992, p.223). Short-term changes in oceanic oscillations cause climate variations. Modification to ocean processes plays a significant role in spreading heat through slow and deep water movement. Differences in earth’s orbit positions cause seasonal changes in sunlight distribution (Christopherson, 1992, p.222). There are three types of orbital variations i.e. earth’s eccentricity variation, variation of the tilt angle of earth’s axis of rotation and the earth’s axis precession. Climate change causes variations in sun radiation. It has triggered little ice age, and temperature increase observed in 1900’s to 1950’s. Volcanism is a significant factor that triggers climate change. Wignall (2001) asserts that volcanic erupti ons emit carbon dioxide causing immense effects on the climate (p. 21). Forest et al. (1999) assert that plate tectonics affects local and global patterns of climate and atmosphere-ocean circulation (p. 23). Solomon et al. (2009, p. 1705) asserts that human activities leading to increased carbon dioxide emission are the key factors contributing to climate change. Effects and Events of Climate change Climate change still remains to be a global hazard since the green house gases continue to increase across the world (McCathy, 2001, p. 124). Climate change has adverse effects on the environment, ecological systems and the social systems (Cline, 2007, p. 145). Climate change increases or

FINAL EXAM Essay Example | Topics and Well Written Essays - 2500 words

FINAL EXAM - Essay Example They are less important for managing or hedging against short-term exposures because demand uncertainty is always lower in the short term. In addition, operational hedging is likewise less crucial for commodity-based firms that face price rather than quantity uncertainty. Financial instruments are greatly used by forms to hedge against short-term exposures while operational hedges are used greatly to hedge against long term exposures. The foreign currency cash flows of firms that have plants both in foreign and domestic location are not independent of the exchange rate. And therefore, optimal financial hedging policy should entail forward contracts as well as foreign currency put and call options. Natural hedges helped MNCs to offset unexpected fluctuations in foreign currency exchange rates especially operational hedges that are associated with geographical diversification. Operational hedging often compliments financial hedging. For instance, MNCs use financial derivatives to mitigate risks exposures while they are operationally hedged, geographically diversified. Financial instruments are used to reduce the basic component of profit variability while geographical diversifications (operational hedges) can reduce firm-specific risk exposures. The use of both financial derivatives and operational hedges improves firm value. Operational hedges are not perfect substitutes for financial risk management. In the case of CARREFOUR S.A., Carrefour used financial market instruments, Forward contract, to hedge against their foreign currency borrowings in order to maintain total debt requirements at 97% in Euros. MNCs often use both parallel loans and currency swaps to achieve a similar objective. For instance, they provide a cheaper form of debt because they easily borrow in their respective countries and then swapping the debt. Both parallel loans and currency swaps helps the MNCs in