Online prediction markets in the US are expanding into weather and climate betting, with Kalshi reporting 500% growth in such wagers over the past year, taking the market to $1.1bn. The company is now partnering with the Weather Company, which owns the Weather Channel, to boost its credibility in this new arena.
Kalshi and Polymarket, two major platforms, are considering the climate itself as a growth area beyond sport and crypto. Bets can be placed on daily temperatures, the pace of ice melt and coral die-off, and the number of costly climate disasters in a year.
Scientists raise concerns over trivialising suffering
Some climate scientists have expressed unease about people betting on the well-documented breakdown of a stable climate caused by fossil fuel burning. They argue such bets trivialise and gamify human suffering, distancing people from action on the climate crisis.
Particular alarm has been raised about betting on wildfires, after large wagers were placed on the Los Angeles fires last year. Kalshi and Polymarket stress they have banned such betting due to unintended incentives for would-be arsonists.
“I find it depressing because it’s distracting us from what we should be focusing on,” said Kaitlyn Trudeau, a scientist at the non-profit Climate Central. Trudeau’s grandfather lost his home in the LA fires, and she was aghast to find people had been betting on the disaster.
“I’m not against prediction markets in general but we need to be clear about the downsides,” she said. “They aren’t going to reduce the risks of climate change or solve climate change.”
Markets see role in forecasting
Prediction markets, which are essentially a gauge of public opinion, see their role as forecasting events in the natural world. A Kalshi spokesperson said the company sees itself as part of “well-calibrated forecasting data”, using the wisdom of the market to help predict how hot it will get, how bad floods will become and other environmental outcomes.
A growing array of data, and the use of artificial intelligence in harnessing it, is helping scientists work out thorny questions over how the climate crisis is set to unfold. Prediction markets may add to this in some way.
Uncertainty over climate predictions
Recent evidence suggests that anyone predicting exactly what will happen to the planet over this century will have a tough task. The United Nations recently conceded that a foundational international target to restrain global temperature rise to 1.5C beyond pre-industrial times is now already effectively trashed.
Global heating is too rapid and unrestrained to meet the 1.5C goal, which will cast billions of people into extreme weather, food insecurity and heightened risk of cataclysm. Conversely, the advance of clean energy means the very worst previous scenario, a pathway known as RCP8.5 lined with rampant coal burning, is now unlikely. The absolute worst and most optimistic scenarios have been swept from the table in just a handful of years.
“Feedback loops” from natural systems such as thawing permafrost, supersized wildfires and overheating wetlands mean that planet-heating emissions from such sources could accelerate overall global heating by as much as 30%, a recent study found. This will add as much as 0.4C to the overall global temperature. But even in this stark new study, researchers caution that there are uncertainties.
While for now we still retain some control over our own destiny, the situation could still gallop away from humanity – the planet, once provoked, could unleash far hotter temperatures than this. Perhaps, hopefully, it will be less sensitive. But do you really want to bet on that?
