A sure bet? Rush to boost weather modelling
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.