A sure bet? Rush to boost weather mod­el­ling

The Sunday Telegraph - Money & Business - - Business -

The full eco­nomic costs of hur­ri­canes Irma and Har­vey could have topped $300bn (£221bn). These were the early es­ti­mates for a pair of su­per­storms dubbed the worst in the his­tory of the US, writes Jil­lian Am­brose.

By Mon­day Irma’s ex­pected tra­jec­tory made a mod­est east­ward shift of around 20 miles which slashed the likely cost of the storm to less than $75bn, or un­der half that of Har­vey.

The ma­jor cor­rec­tion un­der­lines the dif­fi­culty in fore­cast­ing the risk posed by ex­treme weather events made more se­vere by cli­mate change.

Win­ton Cap­i­tal, one of Europe’s largest hedge funds, be­lieves a mar­ket-based ap­proach could help. The fund is invit­ing cli­mate sci­en­tists to put their money where their mod­el­ling is.

Its cli­mate pre­dic­tion mar­ket will al­low “play­ers” to bet on the ef­fects of cli­mate change by analysing shifts in tem­per­a­ture and car­bon diox­ide lev­els in the at­mos­phere.

For now, the ob­jec­tive is to cre­ate an an­nual not-for-profit bench­mark which cuts through the scare­mon­ger­ing to present a clear aca­demic con­sen­sus.

But, as with any mar­ket, liq­uid­ity will prove key to its suc­cess. The greater the vol­ume, the clearer the mar­ket sig­nal. Other mar­kets could fol­low too: sea level rises, other ex­treme weather events, air pol­lu­tion.

The pro­posal, still in its in­fancy, is not a new idea. But in the wake of the US hur­ri­cane sea­son, the grow­ing con­cern over fu­ture cli­mate sce­nar­ios could make Win­ton’s mar­ket a re­al­ity.

In the last 50 years the num­ber of nat­u­ral dis­as­ters has in­creased four­fold. The sever­ity is in­creas­ing too.

Al­though no sin­gle weather event can be at­trib­uted to cli­mate change, sci­en­tists agree that warmer sea tem­per­a­tures helped to make the re­cent US hur­ri­cane sea­son worse.

Hur­ri­canes are a par­tic­u­larly de­struc­tive con­se­quence of a slowly warm­ing world. Storms are fu­elled by the evap­o­ra­tion of sea­wa­ter, and become more in­tense in line with warmer sea sur­face tem­per­a­tures.

Sci­en­tists be­lieve the warmer sea tem­per­a­tures could mean longer hur­ri­cane sea­sons, which ex­tend be­yond their typ­i­cal ge­o­graphic zones. The storms could also form quicker and become larger. Typ­i­cally hur­ri­canes slow as they make land­fall but in the case of Har­vey wind speeds in­creased, again fu­elled by quicker evap­o­ra­tion of ocean wa­ter into the storm sys­tem.

Irma may not have proved to be as calami­tous as first feared but it is a sure bet that her suc­ces­sors will be awaited with as much con­cern.

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