Climate Services: The Business of Physical Risk

By Madison Condon. 

A growing number of investors, insurers, financial services providers, and nonprofits rely on information about localized physical climate risks, like floods, hurricanes, and wildfires. The outcomes of these risk projections have significant consequences in the economy, including allocating investment capital, impacting housing prices and demographic shifts, and prioritizing adaptation infrastructure projects. The climate risk information available to individual citizens and municipalities, however, is limited and expensive to access. Further, many providers of climate services use black box models that make overseeing the scientific rigor of their methodologies impossible— a concern given scientific critiques that many may be obfuscating the uncertainty in their projections. Municipalities that want to challenge insurance and bond rating determinations must rally significant resources for modeling and data, a scattershot policing method at best. And when companies have access to sophisticated modeling about future impacts— some of them potentially devastating for entire communities—the decision to share that information has been largely left up to the corporation . . . Full Article.