Make no mistake about it, combining IBM and The Weather
Company (TWC) is about as good as it gets for companies looking to improve
their responsiveness to today’s extremes of weather. This is not just because IBM’s Watson
Analytics promises to add in-depth business insights and additional
predictability to your basic average weather forecast. In fact, The Weather Company is if anything
the more important partner, because it has established a solid track record for
anticipating some of the more unusual effects of such events as Hurricane Sandy
– and Jeff Masters of Weather Underground is an effective analyst with a good
appreciation of the effects of climate change on weather patterns.
And yet, the recent announcement of the alliance also serves
to show how today’s business analytics is severely handicapped in its ability
to incorporate likely future changes in climate and their effect on business
for all but the next few days. To put it
another way, IBM/TWC can help a Boston-based firm anticipate and adjust on the
fly to a 2-foot snow 5 days from now; but to make the necessary repairs to
buildings to avoid roof collapses and leaks, and to make plans to truck snow to
more remote locations because local “snow farms” can’t handle so much snow,
when there has never been a need before – well, that IBM/TWC probably won’t
help with. However, increasingly,
that’s where much of the additional weather-related business cost these days
resides. (And of course, what goes for
IBM/TWC goes for other analytics solutions in spades)
The real problem here is the lack of a global climate model
that operates on the basis of the most likely climate changes over the next 30
years, not just the ones that can be verified by conservative scientific
analysis. To take one example, we know
that melting permafrost is likely to have a significant effect in warming the
globe by releasing carbon and methane over the next 30 years, but since we
can’t rule out the possibility that it will have no effect, today’s climate
models do not include permafrost melting effects.
As a result, even if Watson were to incorporate such a model
in its projections of weather over the next couple of years at business
locations, it would be very likely to fail to anticipate the extremes of
weather that would actually occur. Thus,
Heidi Cullen, another meteorologist savvy about climate change, wrote a book a
few years back in which she projected that NYC would see a major hurricane with
a dangerous rise in the water level that threatened the city – but with a
near-miss in 2017 and with a greater Hurricane Sandy equivalent happening in
2041.
A Quick Fix
So what’s a poor business to do? Well, as of now, someone within the
organization needs to develop enough expertise in today’s climatology to be
able to create an informal “model” based on current research that can project
possible regional climate changes for business and sales locations over the
next five years – assuming non-zero global-warming effects of “known unknowns.” Then, the business needs to run “what-if”
weather scenarios that include these new possible extreme weather events – high
winds, new hurricane locations, extreme rain and snow, extreme drought – and also
their ancillary effects – water shortages, stressed utilities, difficulties
getting to stores and work, impoverished consumers. TWC’s expertise would be critical in
determining the “penumbra” of related weather – geographical size and track of
an extreme storm, frequency/length of extreme droughts – while IBM’s analytics
would scrutinize the unfolding scenario for business impacts of ancillary
effects. This approach would do a far
better job of adequately preparing the firm for the medium term (say, 2-5
years).
Ah, but then there’s the longer term, 5-35 years out. What prepares the firm for medium-term adaptation
may very well prove to be more costly than adaptation that gives up certain
locations as lost causes – and far, far more costly than the firm taking its
fair part in effective global mitigation.
Getting Specific
What follows is necessarily speculative and US-centric, but
should give an example of both medium-term and long-term business
thinking. Today’s “new climate” as it
plays out over the next 2 ½ years is characterized by a modified “el Nino/la
Nina” cycle and a new Arctic impact on weather, especially in winter. High temperatures along various parts of the
Pacific have attenuated el Nino and delayed its onset, but over the next 2
years, and possibly for longer, we should be in an el Nino phase characterized
by higher temperatures than normal, especially in the western US. At the same time, extensive warming of the
Arctic combined with a mild el Nino should lead to significantly higher Arctic
temperatures in the summer (and winter), and may redirect the cold and “extreme
snowfall” of this winter to the European side of the Atlantic.
However, at the same time, Greenland ice melting has been
putting a fresh-water “cap” on the area where the Gulf Stream dives down to the
deep ocean, slowing and weakening the “force of flow” of the Gulf Stream. At the same time, the greater increase in
winter temperatures in the Arctic due to global warming compared to the
continental US has made it easier for Arctic cold to “punch through” the jet
stream and park over the eastern US for weeks at a time. The increased warmth of that Arctic air means
increased incidence of “extreme snowfalls” either in the eastern US or (in the
other phase of the “Arctic oscillation”) in northern Europe.
Combining the two effects above with ongoing global warming,
and we might project winters similar to the last 2 in the eastern US, but with
a shorter snow season and slightly warmer temperatures. The southern and western US may see
significantly higher summer temperatures, and we cannot anticipate that the
drought in the California area will be overcome by enough rain to replenish
reservoirs, especially with little or no snowpack in the Sierras. Finally, we might anticipate that there may
be another out-of-season Hurricane Sandy or 75-80-mph nor’easter in the
Northeast, with higher-wind-speed hurricanes in the South. Overall, the globe should see a faster
increase in temperatures year-round, leading to record high temperatures over
much of the globe. Businesses should review
not only their dependence on water but also the reliability and
cost-effectiveness of their air conditioning.
Beyond that, in the next 5-35 years, another main actor is
sea level rise. It is plausible that on
average, global sea level will rise almost a foot over the next 35 years, and
the slowing of the Gulf Stream means that sea level rise along the East Coast
may even double that. Sooner than
expected, then, cities such as Miami and perhaps even Boston are under threat, and
increased wave levels during more-violent storms mean faster coastal erosion
and destruction. Businesses should
rethink their investments in locations less than 25 feet above sea level, in
areas of high drought (western and possibly southern US), and in areas
requiring high levels of air conditioning costs. Analytics such as that available via IBM/TWC
plus “what-if” scenarios should allow fine-tuning these shifts in investments within
regions.
The Bottom Line
One line credited, I believe, to an IBM employee way back
when, said of programs in general what could well be said of “business as usual”
weather-related analytics: “Garbage in,
garbage out.” In other words, if you
assume that future weather will be like the past, with today’s climate change,
that assumption is untrue “garbage”; and the result of your analytics will be
either a 5-day horizon that gives you that long to make major changes in your
current setup at various locations, or a very misleading guide to your
multi-year strategy’s chance of avoiding major unnecessary weather-related
costs – a medium-term forecast that is “garbage” as far as effective planning
is concerned.
I have suggested one approach to overcome this problem; but,
really, the first step is to recognize that dealing “just in time” with a
weather problem is far less than half the battle, and to do something about
it. If you do create an approach along
the lines I have suggested, however, IBM/TWC is an exceptional partner, because
TWC “gets” climate change and because IBM via Watson and the like can dig
deeper for related business effects, once the data it is fed is no longer “garbage.”
One final thought: I and
others like Joe Romm have said that mitigation (avoidance of further carbon
emissions and hence far greater climate change) was and is far less expensive
than adaptation such as the steps we have talked about here. Unfortunately, in the 5-7 years since this
point was made, most businesses have failed to have much positive impact on
mitigation, either in their investments or politically. As a result, the costs of mitigation have not
increased significantly, but the costs of the adaptation that has now become
necessary have risen quite a bit. To put
it another way, ignoring mitigation has guaranteed much more in the way of
adaptation costs – and we may anticipate the same happening over the next 5-35
years, unless most businesses change both their political and investment
practices in a much more drastic way.
