Money Talks, and It Says Climate Change Is Real

Here’s an interesting chart from a research paper flagged by a reader. It turns out there’s a Chicago futures market for weather, mostly used by utilities and growers to hedge against the possibility of unusually high or low temperatures. However, since weather forecasts are nearly useless more than ten days out, futures contracts purchased earlier than that are based almost entirely on broad climate forecasts.

Climate scientists, of course, have been predicting global warming trends for quite a while. So how do their models compare to the predictions made by people who have to put their money where their mouths are? Pretty closely, it turns out. Here, for example, is the predicted number of “cooling days” (i.e., hot days that will require cooling) during the summer for the past couple of decades:

The light and dark blue lines are the two most widely used NASA climate models. The green line shows the equivalent projection based on the futures market. Guess what? When money folks have to hedge the weather, it turns out they listen to climate scientists. Their projections closely match the predictions made by climate models.

When Republican senators make fools of themselves pretending that climate change is fake, they know there are no consequences for being wrong.¹ Traders don’t have that luxury. What they care about is accurately hedging risk, and the only way to do that is to listen to climate scientists and make their bets based on the real world. So regardless of whether they’re personally liberal or conservative, that’s what they do.

¹No short-term personal consequences, anyway. The possibility of broiling the earth 50 years from now is a whole different thing, but it doesn’t affect their reelection chances so they don’t care.

$500,000 MATCHING GIFT

In 2014, before Donald Trump announced his run for president, we knew we had to do something different to address the fundamental challenge facing journalism: how hard-hitting reporting that can hold the powerful accountable can survive as the bottom falls out of the news business.

Being a nonprofit, we started planning The Moment for Mother Jones: A special campaign to raise $25 million for key investments to make Mother Jones the strongest watchdog it can be. Five years later, readers have stepped up and contributed an astonishing $23 million in gifts and future pledges. This is an incredible statement from the Mother Jones community in the face of the huge threats—both economic and political—against the free press.

Read more about The Moment and see what we've been able to accomplish thanks to readers' incredible generosity so far, and please join them today. Your gift will be matched dollar for dollar, up to $500,000 total, during this critical moment for journalism.

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate

We have a new comment system! We are now using Coral, from Vox Media, for comments on all new articles. We'd love your feedback.