Paper Title
Climate Risk and Catastrophe Bond Prices

Abstract
This research analyzes how the fluctuations of climate cycles and carbon dioxide (CO2) levels affect catastrophe (CAT) bond prices in primary and secondary markets. Our results uncovera significant link between the primary and secondary markets where by CAT bond prices in the secondary market incorporate both explained and idiosyncratic information in the primary market. More importantly, CAT bond prices in the secondary market reveal risk information from the six climate cycles and CO2 variations, but not so in the primary market. Thus, the secondary market with more information helps market prices reveal private information and improves price quality. Overall, our empirical evidence also supports that CAT bond markets are a successful financing scheme for CAT risk in terms of timely reflecting the risk information of climate cycles and carbon dioxide for CAT bond prices in secondary markets. Keywords - Climate Risk, CAT bond prices, Price quality, Primary market, Secondary market.