Weather profits: Weather derivatives and the commercialization of meteorology

Abstract

While many scholars researching the commercialization of science focus on biomedicine, this paper explores the changing commercial frameworks for meteorology in the UK and the US. The organization of meteorology in both countries increasingly reflects a political-economic approach that treats science as an economic entity in which market-based criteria can be used to allocate scientific resources. The differences are equally significant in terms of the production and dissemination of meteorological forecasts and other data to public and private services. Alongside this commercialization has been the emergence of weather derivatives markets -financial products that enable trading on weather indices in a way similar to oil or gas futures -which have re-shaped how some businesses interact with meteorologists. This paper explores how weather derivatives traders engage with, shape, and are frustrated by a commercialized approach to funding meteorological data and forecasts. It highlights how commercial imperatives raise questions about the collection and quality of meteorological data, and how forecasting and weather modelling is being adopted within the private sector to enable trading strategies in the weather derivatives market. The consequences for commercial actors are highly variable, suggesting that any account of commercialization of science, while recognizing extant policy shifts, must be sufficiently nuanced in its interpretation of such effects.On 23 May 2006, representatives of the UK Meteorological Office, which is funded by both the Ministry of Defence and its own commercial activities, were brought before the regular meeting of a UK parliamentary committee to account for how they had lost at least £1.5 million of public money in a failed business venture. The business, weatherXchange, had been established in 2001 as a joint venture with a financial broker (Umbrella Social Studies of Science 40(5) 705-730

Cultivating critical practices in physical geography

“…), and following Lane (), we think that others will accept that: Outlooks and perspectives on scientific (geographic) practices are influenced by personal and institutional experiences, histories and training (see Oughton and Bracken ). Situated framings engender particular preferences and positionalities that underpin our practices, despite the inherent quest for independence, rigour and replication. There is a political economy to research – research requires investment by actors and organisations, and not all concepts, framings, methods and models are created (and circulated and embedded) equally. There is an increasing focus on method in physical geography – emphasising ‘skills’ such as mathematical and computer modelling, instrumentation advances and the application of tools within Geographical Information Science (recognising the notional power of objectivity and universality that these tools yield, and the privileges given to the processes and scales that are specified). There is a strong focus on ‘application’ and ‘integration’ in environmental science, which is disciplining the style and form of knowledge to encourage approaches and ‘packages’ which transfer insights across space, or order them into specific theoretical‐political containers, such as Earth System Sciences, Ecosystem Services (Potschin and Haines‐Young ), risk derivatives (Randalls ), and so on. Opportunity costs of teaching and research framings are often not explored and engaged. For example, do emphases upon methodological developments and techniques come at the expense of emphasis upon explanation and critical inquiry (with attendant alternate skills development)? The recognition that environmental science is innately partial and that it is shaped by societal institutions is well established within physical geography (e.g.…”

Banking Nature? The Spectacular Financialisation of Environmental Conservation

“…Diverse commentators agree that key interconnected aspects of this process include deregulation of lending (ie money creation) practices; intensification of money creation through computer‐assisted parcelling out and exchanges of debt, prevalent since the 1980s through the “securitisation” and privatisation of mortgage lending (particularly in the USA and the UK); and the repeated bailing out with public sector resources of associated irresponsible lending and investment practices of a finance elite (eg N Ferguson 2009; McNally 2011; G Sullivan 2011). I contend that this “increasing financialisation of everyday life throughout the globe” (Nealon 2008:6) now extends into discourses of environmental conservation and sustainability, combined in part with the financialisation of risk associated with environmental and atmospheric change (Cooper 2010; Lohman 2012; Randalls 2010). As Jason Moore (2010:390) observes, “the penetration of finance into everyday life, and above all into the reproduction of extra‐human nature” is a key feature of contemporary capitalism.…”

Climate service warnings: cautions about commercializing climate science for adaptation in the developing world

“…Indeed, we demonstrate that the commercialized model for providing climate services can in some cases enhance, rather than diminish, the difficulties of using climate science to inform adaptation. Although our argument relates specifically to climate services—and the ways that commercialization, the international development context, and the complexities of climate science combine to militate against the production of useful climate information—we echo critics of the increasing commercialization of meteorological information and weather services . We first discuss the climate service business model and its objectives.…”

“…As with many aspects of social, political, and environmental life over the past thirty years scientific institutions have been ‘exhorted to become more like corporations, whose products are “information” and “human capital”’ [Ref , p. 23]. But this is not mere rhetoric; research demonstrates that private market dynamics develop from encouraging practices like entrepreneurialization, competition, value‐creation, and public‐private partnerships [Ref related to climate governance, see Refs ].…”