The multi-billion dollar “climate services” industry against climate change

The multi-billion dollar “climate services” industry against climate change

Will the rise of private climate services - where companies sell tailored data to customers - benefit society as a whole or only those who can afford to pay?

How do we avoid a future in which the best data to save lives and properties from climate destruction is only available to those who can afford it?

This is the question asked by some observers and critics of "climate services". The rapid growth of this field in recent years marks a profound change in the way our society creates and uses science. Rather than focusing broadly on the regional, national or global impacts of rising temperatures, climate service providers create data tailored to specific decision makers - the mayor of a coastal city, for example, or the director executive of an energy services company.

This field is spawning an industry of climate service companies that see the potential for huge profits by selling personalized data to clients who want to know in explicit financial detail where and how much climate change will affect them.

One of the industry leaders, a Silicon Valley executive named Rich Sorkin, defended climate services in May before the US House of Representatives Subcommittee on the Environment. He argued that taking large-scale climate science produced by federal agencies and turning it into hyperlocal threat assessments is a crucial and effective way for cities, states, companies and investors to better prepare for the climate emergency.

Sorkin suggested that his risk-focused climate company Jupiter is uniquely suited to take on this job. "We believe that the federal government should delegate to the private sector in this area," he said in a statement.

According to researcher Svenja Keele, the growth of private climate services "removes incentives for climate science from the public interest and leads to the continuous search for benefits"

However, that is not a universally accepted opinion. Earlier this year, the magazineClimatic Change dedicated a special issue to climate services, which included tough questions from critics. University of Melbourne researcher Svenja Keele argued in a paper that the growth of the field "removes incentives for climate science from the public interest and leads to the continued pursuit of profit."

Meanwhile, University of Guelph assistant professor Eric Nost wondered, "When do existing vulnerabilities really exacerbate climate services?"

Sorkin argues that companies like his - which is part of an industry that was valued globally at $ 2.6 billion in 2015, with annual growth of 6% to 10% - are agile and innovative where government can be slow and cautious. . "We are years ahead of what the public sector is doing," he says.

In his presentation, he compared the impact of Jupiter on climate science with the disturbing influence of Amazon, Microsoft and Google on supercomputing: “In almost all cases, the private sector is leading the adoption of these new technologies, driven by the brutal competition for profits ”.

And for companies like yours, those earnings can be lucrative. Jupiter's clients include oil and gas, insurance and defense companies. A new client can expect to pay between $ 200,000 and $ 500,000 to learn how they are exposed to floods, heat, storms, fires, and other impacts of climate change. A one-year subscription could start at a million dollars, Sorkin says, "and for large corporations it could be a lot more than that."

Other companies are also trying to capitalize on the fear and financial insecurity brought on by rising global temperatures and unpredictable weather.

Climate services Good for society?

But this has raised questions about who really wins.

"Commercially developed climate services] are often exclusive and only accessible to those involved and / or who pay for that service," wrote in an email Marta Bruno Soares, a Met Office UK university fellow. "What is critical at this point is understanding how climate services are being authorized and what access is allowed to whom."

Even industry leaders recognize the risk of the not-so-distant future where the rich and powerful have better information and tools to protect themselves from the devastation of climate change than the poor and vulnerable.

"That's a huge concern, and I'm certainly not going to pretend we have the solution," says Emilie Mazzacurati, founder and CEO of Four Twenty Seven, a California-based weather services company that was recently acquired by Moody’s. When it comes to adapting to climate change, he adds, "there is huge inequality and huge concerns about equity that we are not going to solve with data."

"I think it's an extremely important issue that we are paying a lot of attention to trying to address," says Sorkin. According to this executive, the company is looking for ways to help those with the fewest resources, such as working with communities in the United States to get away from climate hazards rather than simply rebuilding after a disaster strikes. "We are not in a position to give away what we are doing, but we do a substantial amount of altruistic work," he says.

Risk integration

Mazzacurati founded Four Twenty Seven after Hurricane Sandy devastated New York City in 2012. “What struck me the most was the chaos that [an] extreme weather event could bring to one of the richest, most organized, and most economically active cities. the world's resources, and some of its most powerful companies, ”he later recalled.

With parts of Manhattan flooded and without power, he wonders why financial organizations in particular - requiring a detailed understanding of risk to survive - fail to prepare for an obvious climate threat.

"Scientists were saying 'we knew this could happen," says Mazzacurati. "[There was] a disconnect between data and projections on climate change risks and the fact that they were not systematically integrated for most organizations."

Four Twenty Seven describes itself as a provider of "market intelligence". But it is based on the assumption that companies and investors learning about the hyperspecific dangers they face from climate change - whether it's a factory exposed to flooding or a high-carbon investment that could devalue a portfolio — will not only protect your individual assets, but will drive broader climate solutions.

"We need both global political action and corporations preparing for specific shocks," says Mazzacurati. "Understanding how complex [and costly] those impacts are ... should help motivate greater political commitment."

While leading the climate services team at the Met Office Hadley Center, Carlo Buontempo undertook a project on the impact of climate change on corporations and oil companies.

“When you change the narrative and start debating the impact climate change will have on them rather than how evil they are… then you have a completely different conversation,” says Buontempo. "It is likely to trigger action."

But potentially only up to a point. In 2017, Royal Dutch Shell divested $ 7.25 billion in Canadian oil sands investments after learning of the financial damage that a market shift to low-carbon energy could have on its business model. Yet around the same time the company spent $ 53 billion acquiring fossil fuel giant BG Group, andThe Economist recently reported that Shell is "allocating the majority of its annual capital expenditure budget of $ 30 billion over the five-year period [2021-2025] to fossil fuel projects."

Replacement or supplement

Critics wonder whether it is wise to assume that the interests of corporations and other powerful players align perfectly with the broader interests of society.

“We must be vigilant about the possibility that [climate] service delivery models, written in the language of entrepreneurship, efficiency, utility, customization and flexibility, simply cement the status quo… rather than support transformative and equitable responses to climate change, ”Keele wrote inClimatic Change.

Critics wonder if it is wise to assume that the interests of corporations and other powerful actors align perfectly with the broader interests of society.

Proponents, meanwhile, question the underlying premise of such criticisms: that the growth of climate services comes at the expense of traditional research. "We are not replacing the fundamental science that scientists and government agencies do," says Mazzacurati. "We are users of the data and we help bring it to market." In fact, the Trump administration's attacks on America's climate science - including a proposal to cut $ 1 billion from the National Oceanic and Atmospheric Administration alone - are unpleasant news for the industry. "We are very concerned about the budget cuts," says Mazzacurati.

Still, Sorkin acknowledges that a private sector approach - at least on its own - is unlikely to serve the needs of the planet's most vulnerable. "We don't really see underdeveloped countries or communities as profit generators for us," he says. These kinds of projects, he says, only make financial sense with the government or NGOs as partners.

A desperately needed change

No matter which side you're on, the fact is that decades of warnings from climate scientists have yet to produce the global action necessary to prevent catastrophe. Buontempo says that companies responding to narrow selfish interests are one aspect of a desperately needed shift away from carbon-producing activities, along with strategies to cope with the shocks we are already trapped in.

"The participation of the private sector is inevitable for me," he says. "There are not enough academics working on the climate to develop all the services a society needs at this stage." Regardless of whether or not this is the case, the question remains the same: Who will ultimately benefit from this participation, society at large or the wealthy and well-positioned?

By Geoff Dembicki

- Translation by Pilar Gurriarán.

Source: El Salto