The business of projecting climate change
In the aftermath of America’s disastrous 2017 hurricane season, some media outlets became interested in the people who were going to profit. One of these people was Albert Slap, CEO of Coastal Risk Consulting.
“[He] would rather not be profiting from other people’s misfortune,” wrote Bloomberg. “But his business, determining the flood risk facing specific homes around South Florida, has never been better.”
While the surge of interest in his company has since abated, Coastal Risk is still going strong. Slap’s climate change tech startup is built around selling property owners the answer to a simple question:
“I like to say: ‘What’s the spanking you’re gonna get if you don’t do anything?’ ” Slap told me over the phone.
The ongoing Amazon fires and the political ascendance of climate denialism have made one thing clear: the world is not on track to prevent or even minimize global warming. Our next-best hope is adaptation – preparing for the worst. Families can pay $49 for a Coastal Risk estimate, or $1 million a year for Jupiter’s ClimateScore™ Intelligence Platform (which, as the website boasts, “incorporates AI”). If you can’t stop global warming, at least you can pay a climate data startup for information about your piece of it.
But are these firms selling “adaptation for some,” while letting the poor wallow in ignorance? The answer: it’s complicated.
Inequality & data poverty
The main critique of climate startups is that they create an informational imbalance: the rich will hoard our best climate models, while the poor, underserved by governments, won’t have access to the data they need to prepare.
Jupiter CEO Rich Sorkin didn’t exactly alleviate this concern when he said “we don’t really see underdeveloped communities or countries as profit generators.”
But two academics I interviewed, both of whom study the politics of climate change, were skeptical about whether climate startups are much of a problem.
“The climate services industry as a whole is not driven by a profit motive,” said University of Sydney lecturer Sophie Webber.
Moreover, it’s not clear that having access to cutting-edge climate data is a secure defense against climate change’s highly unpredictable future effects. Joel Wainwright, co-author of “Climate Leviathan: A Political Theory of Our Planetary Future”, said climate startups may be overhyped.
“I regard their claims to being able to do something really fancy or sophisticated as a bit of marketing,” he said.
Capitalism and the climate
The real danger, some suggest, isn’t climate startups, but the lack of government action that creates a growing demand for their products. “There has been such large-scale defunding of climate science in…conservative nation-states. That is one of the reasons why this private sector has grown,” said Webber.
When you saw the Amazon fires, you probably worried a bit about what it meant for the planet. Now imagine you run a corporation with billions of dollars invested around the world. Wouldn’t you take steps to protect your investments? To do that, you might approach a company like Jupiter or Four Twenty Seven, which will try to tell you how exposed your portfolio is to the apocalypse.
And that’s where one real problem may lie: Not in the fact that big corporations will have more data, but that they might act on that information in a selfish way. Slap, the CEO of Coastal Risk, posed the following hypothetical.
“A fund manager has 10 billion dollars worth of assets, and he says, ‘I got this information and I think that in a certain area there’s going to be a lot of sea-level rise or there’s gonna be extreme heat or drought. I’m going to disinvest in that area.’ Yeah, fine. That may be good for him or her, maybe good for the investors. But does it accelerate the resilience of the assets themselves? What about the building? What about the people who work in the building?” Slap said.
Slap said Coastal Risk works at the smallest scale, to help homeowners and businesses adapt their properties, rather than disinvest from them.
Yoon Hui Kim, director of client services at Four Twenty Seven, which advise large investors, countered that knowing more about their risks can sometimes motivate her clients to take action.
“You have to understand risk before you can build resilience,” she said. Moreover, she added that once companies realize how exposed they are, they become more interested in broader community resilience.
Hoping for corporate action suggests a kind of trickle-down climate economics: when corporations try to save themselves from climate change, they could help us all along the way. But for academics like Wainwright, this is a false hope, and capitalism is spectacularly ill-suited to adapt the world to climate change.
“[T]he idea of ‘planning for climate change’…generally expects poor people to do a lot of adapting, and rich people to not do very much adapting. Except, of course, hedging their bets with their money,” Wainwright said.
Indeed, even if climate services firms made their products freely available to the poor and vulnerable, it would not save them.
“In most instances, having access to climate information isn’t going to enable you to make adaptations,” Webber said. Survival is not a question of data access; it’s a question of politics.