Norway is a country rich in natural resources. Wind, rain and snow provide us with a huge resource for clean energy production, while oil and gas have since the early 70ties contributed significantly to our economic wealth. Nowadays the income from oil and gas exploitation is invested in the world’s financial markets to ensure the welfare of future generations. With global concerns about our climate, renewable resources for power generation become more and more important. Bad management of these resources will be a waste that is “cheap” to avoid given the right tools. These are the motivations behind the research in the group Stochastics for Environmental and Financial Economics (SEFE).

The focus of the SEFE group was on analysis and management of risk in the environmental and financial economics. We proposed and studied new mathematical models for describing the uncertain dynamics in time and space of weather factors like wind and temperature, along with sophisticated models for pricing in energy, commodity and more conventional financial markets. Given such models, which naturally are formulated in the language of stochastic analysis, we analyzed problems of risk management developing new methods for optimal stochastic control theory.