Page 105 - Carbon Capitalism and Communication Confronting Climate Crisis

7 BIG DATA, OPEN DATA AND THE CLIMATE RISK MARKET 91

double win: helping to stabilise economies as firms navigate the uncertain
weather conditions that climate change brings and simultaneously making
substantial profits that contribute to overall economic growth, particularly
in the financial centres of the global economy.
Many liberal economists would argue with Stiglitz (2012, pp. 42–43)
that within a capitalist economy market failure occurs when there is either
imperfect competition, externalities (when a group is affected—positively
or negatively—by others’ economic activity), information asymmetry or
when risk markets are absent. Some might therefore argue that the
development of climate risk markets and the increasing availability of free
meteorological data might counter some of the market failure problems
posed by climate change.
However, in relation to the mitigation of climate change there are risks
in the development of weather derivative markets that could lead to neg-
ative societal outcomes. This is because they enable the finance industry to
generate substantial profits from products that aim to create a sense of
security for end-users concerned about climate instability, allowing them to
be “less concerned, or not concerned at all, about the impact of weather on
cashflow or return” (Dischel 2002, p. 19). These climate risk markets in
effect risk reducing the incentive of powerful economic actors to take and
demand significant action to mitigate climate change. Such a scenario
could increase the negative impact of the actions of those benefiting from
these markets, at the expense of the majority, particularly those most
vulnerable to climate instability. As more speculators enter the market
(Thind 2014), the increase in climatic uncertainty as mitigation efforts fail
also presents a growing opportunity to extract profit from the crisis.
While climate risk markets have many interested parties advocating on
their behalf, there are others that are more sceptical. Melinda Cooper
(2010), for example, argues that weather derivatives are “a claim over the
future in all its unknowability—a claim over event worlds that have yet to
actualize in space and time” (p. 181). In her analysis of some of these deep
seated uncertainties, Cooper (2010) draws on documents produced in
2008 by the US Government’s National Intelligence Council and the US
non-profit Center for a New American Security to argue that, in the world
of US strategic scenario planning, “turbulence” in relation to financial
markets, climate change, and energy (p. 169) is no longer perceived as
something that there is a possibility of managing and avoiding; rather,