Climate change for profit

Growing market volume of weather derivatives (million USD) in Japan. Source: Compiled by the author, based on Yamada, 2010, SEE article references.

Growing market volume of weather derivatives (million USD) in Japan. Source: Compiled by the author, based on Yamada, 2010, SEE article references.

Record of global average temperatures as compiled by the NASA's Goddard Institute for Space Studies. (2006) Figure originally prepared by Robert A. Rohde.

Record of global average temperatures as compiled by the NASA's Goddard Institute for Space Studies. (2006) Figure originally prepared by Robert A. Rohde.

Foreign investment in weather networks such as TAMHO & Smart Agric is proof of the value of meteorological data, not only in Africa, but all over the world. Weather related economic risks create financial opportunities on a scale of tens of billions of dollars globally. Weather insurance companies and weather risk management is thriving as weather derivatives have become a traded commodity in the field of weather risk management.

Managing weather risk

As natural vegetation yields to farm land expansion, reduction in rain water catchment makes not only our economies more susceptible to weather risk, but contributes to global warming, thus fueling the growth of weather derivatives which benefit from global warming and its related weather volatility. The good news is that both vegetation and water catchment can be managed and recaptured by supporting natural processes. Accurate monitoring of critical micro-climates on which natural processes rely to balance and slow global warming, first requires high-quality and high-density meteorological networks with superb long-term stability of measurement, whose data can be traded to create funding for climate stabilization projects.

Plan of action for climate change

Quality weather data complemented by detailed action plans will permit timely reaction to destabilizing effects of erosion of natural processes and to reverse micro-climate changes from human-machine interaction with the environment. Many countries, in an effort to manage water and mitigate future drinking water risk, have begun forming such action plans, many of which include two tiered networks of large and small meteorological and hydrological weather stations like the MeteoHelix.

Meteorological capacity building for profit

Africa, Central & South America, South Asia and Oceana countries require their own meteorological networks. Secondary/tertiary weather networks such as TAHMO and Smart Agric, and their benefits, remain mostly in the hands of foreigners. Such networks need not be an a red expenditure in their meteorological departments’ budgets but an opportunity for meteorological departments to become self-sustainable enterprises. Income from risk mitigation and weather insurance can also mean saving of lives, crops, livestock and local economies.

REFERENCES:

Prabhakar, S.V. R. K. & Srinivasa Rao, Gattineni & Fukuda, Koji & Hayashi, Shinano. (2013). Promoting Risk Insurance in the Asia-Pacific Region: Lessons from the Ground for the Future Climate Regime under UNFCCC. Climate Change Adaptation in Practice: From strategy development to implementation. 10.1002/9781118548165.ch22.

Available from: https://www.researchgate.net/figure/Growing-market-volume-of-weather-derivatives-million-USD-in-Japan-Source-Compiled-by_fig2_261296609 [accessed 24 Apr, 2019]