Page 103 - Carbon Capitalism and Communication Confronting Climate Crisis

7 BIG DATA, OPEN DATA AND THE CLIMATE RISK MARKET 89

In the early days of weather derivatives trading, the right to re-use
without charge weather data produced by national meteorological agencies
was a prominent discourse at industry events. Over recent years, focus on
this issue has reduced, however the ease with which market actors can
access and re-use publicly funded meteorological data is still perceived to
be a significant issue, and a lack of freely available data in some countries is
perceived to be a barrier to market growth. In particular, it has been widely
noted that while in the US weather data has been in the public domain and
freely available for anyone to re-use since before the development of
weather derivative markets, in some competing markets, such as the UK,
the large volumes of weather data required by the climate risk industry have
been treated as a commodity to be traded by the national meteorological
agency (Weiss 2002).
Those promoting the development of weather derivative markets in the
UK, including lobbyists for the UK financial services industry, such as
Lighthill Risk Network (of which Lloyds of London are a member), have
spoken out against this practice for a number of years (Department for
Business Enterprise and Regulatory Reform 2008). They have called for
Met Office data to be made available to commercial users at marginal cost
(which tends to be zero for digital resources), so that traders can freely
access and use it and, therefore, compete more effectively with the US
markets. In the early days of the markets, for example, Weiss (2002)
observed that limited access to weather data in the EU had, by 2002,
resulted in a weather and climate risk management industry 13.5 times
smaller than the nascent US industry, which by this date had built up US
$9.7 billion dollars of contract value over five years.
These demands have filtered down into UK government policy-making.
For example, policy documentation developed by senior policy makers in
what was at the time named the Department for Business Enterprise and
Regulatory Reform (2008, p. 52) indicates support for the financial
industry’s demand for free use of weather data in order to boost the UK’s
weather derivatives market. While policy developments began slowly, the
election of the new coalition government in the UK in May 2010 led to the
demand for free use of meteorological data being quickly incorporated into
the government’s flagship Transparency and Open Government Data
agenda, in line with Open Data advocates’ campaign against the com-
mercialisation of public sector data. In the Autumn Statement of 2011, the
policy developments came to a head with the announcement by Chancellor
of the Exchequer George Osborne, that the UK government was opening