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actor must have a sophisticated knowledge of how the markets work and must have a large enough interest—or an association with others who together have a large enough interest—to make the minimum transactions the market allows.


This chapter shows that both the effects of climatic events on human populations and activities and the potential usefulness of climate forecast information are shaped by sets of coping strategies that have been developed over long periods of time and that are in constant development and change. Specifically:


People have developed a wide variety of strategies for coping with climate variability. Some coping strategies are quite specific to a type of human activity and to the geographic and cultural context of the affected people. Thus, to anticipate the potential impacts of a climatic event on a particular agricultural population, for example, requires understanding of the coping mechanisms available to that population. Drought of a particular severity may not have the same effect on agricultural populations in different countries.


Although there is no well established typology of coping strategies, the distinction between ex ante and ex post types of coping provides a good starting point. Climate forecasts have the potential to improve outcomes for people engaged in weather-sensitive activities both by allowing them to take more effective ex ante actions and by reducing the need for ex post strategies.


It is analytically useful to distinguish major types of ex ante and ex post coping strategies. One type of ex ante strategy consists of technological interventions that reduce danger and increase opportunities associated with climate-related events. A good example is the management of seasonal and interannual variations in streamflow and water supply by systems of dams, reservoirs, and crop irrigation. Having these systems in place prevents flooding in times of high water flow and allows for crop production, fresh water supply, hydroelectric power, and aquatic recreation in dry periods. Construction of firebreaks and use of low-till and no-till farm equipment similarly increase resilience to climate variations.


Another type of ex ante strategy consists of hedging against climate risk—taking multiple actions so that one action provides benefits to partially cover losses that arise if other actions yield poor results. Farmers do this by separating their herds, diversifying crop varieties and species, diversifying income, and buying and selling futures contracts. Electric

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