Lancaster University to open Atlantic hurricanes expert climate prediction market

Researchers at Lancaster University Management School (LUMS) are on a quest to bring together experts to predict hurricane activity in the Atlantic Ocean.

The Climate Risk and Uncertainty Collective Intelligence Aggregation Laboratory (CRUCIAL) – a joint initiative between Lancaster and Exeter Universities – is opening a prediction market to forecast the number of Atlantic hurricanes in the 2024 season.

Hurricanes cause destruction to human life, infrastructure, and the natural environment, with the social, health and economic effects being felt across business and society. Drawing diverse expertise from a range of forecasting teams to predict not only expected occurrence, but also the dispersion and tails of the distribution, has distinct value to decision-makers.

The CRUCIAL market will allow research teams to contribute their expertise to a market-consensus probability forecast that can evolve as new information becomes available. Participants will not pay to take part, but will receive cash rewards from a £20,000 fund, based on the accuracy of their forecasts. The market will open after the 2023 hurricane season ends.

Participants will be invited to take part based on their expertise, and teams wishing to take part are encouraged make themselves known to CRUCIAL via an Expression of Interest.

Dr Kim Kaivanto, Senior Lecturer in the Department of economics in LUMS and a member of the CRUCIAL initiative, said: “Hurricanes are the planet’s strongest and most destructive atmospheric events. They have widespread effects across agriculture, wildlife and property – as well as on human life.

“At the end of August, Hurricane Idalia destroyed crops, dispersed flamingos from Florida to Ohio, killed four people, caused $3-5 billion in private insured losses, and is expected to result in $500 million in claims to the US National Flood Insurance Program.

“The CRUCIAL initiative aims to demonstrate how sponsored prediction markets with expert participants can be used to forecast climate risks by efficiently aggregating diverse expertise and information. In doing so, it can show how they can be used as a mechanism to allocate funding for climate forecasting in a performance-driven way.”

Between the start of the 2023 hurricane season in June and the middle of September, there had been five hurricanes in the Atlantic region – three of them classed as major (Category 3 or above), with winds in excess of 111mph, and causing extensive damage.

Recent research links elevated ocean temperatures with increased hurricane power. The summer of 2023 was the hottest on record, and North Atlantic sea-surface temperatures breaking previous record highs. The number and intensity of hurricanes is being affected accordingly.

For more information on the climate prediction market, and to complete an expression of interest form, visit https://www.crucialab.net/post/expression-of-interest/

Homes in Florida are flooded following a hurricane.