Whenever an article on the science of climate change gets any prominence, and often when it doesn’t, the comments section is flooded with people denying climate change is happening or that humans are involved. However, few, if any, of those people believe what they are saying enough to be willing to bet money on it – even though if they’re right they could easily get very rich.
Every now and then climate scientists do make bets (some doing remarkably well) with those seeking to discredit their work as to average global temperatures over the next few years. Most prominent opponents of climate action dodge offers of these bets – like the member of a prominent climate skeptic think tank who refused two $20,000 bets from Bill Nye – but they do have something of an excuse. It’s hard to ensure your opponent will pay up if the money isn’t raised upfront, or to find a trusted third party to hold onto it if it is.
However, Columbia University’s Professor Wolfram Schlenker and Dr Charles Taylor have pointed out much easier opportunities exist for those who doubt the world is warming to demonstrate their faith. A market exists for weather derivatives, created to allow people whose income is heavily affected by seasonal climates to hedge their risks.
In a working paper on the National Bureau of Economic Research website, Schlenker and Taylor reveal the market is betting on climate change. Analyzing data from between 2002 and 2018, they reveal that trends in weather markets are predicting a changing climate that closely follows scientific climate model predictions. When it comes to money, traders are putting their money where they think the future will be. All bets are placed before the month in question begins. For all eight cities in the US where the futures are offered, the markets, like climate scientists, have predicted trends of warmer winters and hotter summers.
Schlenker and Taylor write on the Center for Economic Policy Research’s Portal that the markets have been consistent with what climate scientists have anticipated. “The relationship is weaker during winters than summers, but still robust,” the pair write. “It holds after controlling for changes in ocean circulation patterns such as El Nino and the North Atlantic Oscillation….When money is on the line, it is hard to find parties willing to bet against the scientific consensus.”
Anyone truly believing climate scientists were wrong would have anticipated great wealth from using these markets to back that view, yet somehow have resisted.
It’s possible some climate change deniers actually did bet on such outcomes, but Schlenker and Taylor’s data reveals their numbers must have been few or the bets small. Anyone who did make such bets probably isn’t boasting about it. While a few months would have rewarded them, the world’s weather patterns have been very much in line with climate models’ projections over the last 16 years, so anyone betting consistently on less heat would have lost out.
The findings confirm what most people trying to communicate climate science suspect; although there are those who genuinely don’t think the world is warming, the loudest voices are well aware their claims aren’t true.