PhD candidate designs ‘weather forecast’ for fossil fuel market

14 Aug 2017

Forecasting volatility in the fossil fuel market is a lot like forecasting the weather, according to a University of Queensland PhD candidate who won her faculty Three Minute Thesis competition last week.

The BEL 3MT winner, runner up and People's Choice winner
L-R - Winner: Ashley Ding, UQ Business School; Runner-up: Anne Pickering, TC Beirne School of Law; People's Choice winner: Joseph Lelliott, TC Beirne School of Law

Ashley Ding, a PhD candidate from UQ Business School, was victorious in the Faculty of Business, Economics and Law’s Three Minute Thesis competition for her thesis presentation The forecast is actually accurate!

The Three Minute Thesis (3MT) challenges Research Masters and PhD students to engage a general audience in their research through a succinct and snappy three-minute presentation.

Ms Ding’s presentation focused on part of her thesis – her work on a “forward-looking volatility index” that can produce unbiased forecasts in the fossil fuel and clean energy markets.

“Fossil fuels are important driving forces of the global economy, but the fossil fuel market can be quite sensitive,” she said.

“Any fluctuations in fuel prices and the resulting market volatility can have huge economic impacts.

“As we have seen with extreme weather events, the key to avoiding massive losses is to have an accurate forecast.

“Unfortunately, there is no weather forecast for the fossil fuel market. That’s why I’ve come up with an index that can forecast in the market and give you an accurate volatility reading.”

The index is based on market expectations, derived from fossil fuel option prices. It sounds complicated, but Ms Ding said you don’t need to be a finance expert to read her forecast.

“What my index does is to summarise in one number how volatile the market will be,” she said.

“Whether you’re an investor yourself, or a superannuation fund manager taking care of your clients or a policy-maker addressing climate change, with my accurate weather forecast you can be more certain about something uncertain in the market.”

Ms Ding’s larger thesis examines fossil fuel and clean energy investment, climate change, and the economic and market risks of a ‘business-as-usual’ approach. Initial inspiration for the thesis struck during her time interning as a carbon auditor.

“I was the only student there without a science background,” she said.

“That was the first time I realised that climate change seemed to be discussed by scientists only.

“I thought, ‘is there a way to put the science in an economic context to increase awareness of climate change?’"

Ms Ding was named the BEL 3MT winner after a close competition against four of her peers. She received $1000 in research funds and will compete in the UQ 3MT final on 13 September.

TC Beirne School of Law candidate Joseph Lelliott was the People’s Choice winner for his thesis presentation Unaccompanied Minors: Developing Law and Policy to Protect the Most Vulnerable Migrants.

His presentation highlighted the phenomenon of the smuggling of unaccompanied minors, and the gaps in international and domestic law and policy designed to protect them.

“Of course, there are a number of international frameworks that bear broadly on the protection of all people or children specifically,” he said.

“But in terms of applying those rights, there’s no real, comprehensive best practice framework specifically for unaccompanied minors, and particularly for smuggled unaccompanied minors.

“And in countries like South Africa, even though they have quite robust laws for protection of unaccompanied minors, their implementation is not good at all.”

As People’s Choice winner, Mr Lelliott will try his hand at the UQ 3MT Wildcard competition on 22 August for a coveted spot in the UQ final.

TC Beirne School of Law candidate Anne Pickering was the BEL 3MT runner-up for her thesis presentation Building pathways for inclusive land reform – customary land holding in the Pacific and beyond: Solomon Islands, Vanuatu and Sri Lanka.

To view the BEL 3MT presentations, click here.

For more information on the UQ 3MT final and UQ 3MT Wildcard competition, click here.