Dr. Roger Pielke Jr writes in the “$82 billion prediction” post Katrina:
The Sarasota Herald-Tribune has an revealing article today about the creation in 2006 of a “short-term” hurricane risk prediction from a company called Risk Management Solutions. The Herald-Tribune reports that the prediction was worth $82 billion to the reinsurance industry. It was created in just 4 hours by 4 hurricane experts, none of whom apparently informed of the purposes to which their expertise was to be put. From the article:
Their task: Reach consensus on how global weather patterns had changed hurricane activity.
The experts pulled aside by RMS were far from representative of the divided field of tropical cyclone science. They belonged to a camp that believed hurricane activity was on the rise and, key to RMS, shared the contested belief that computer models could accurately predict the change.
Elsner’s statistical work on hurricanes and climatology included a model to predict hurricane activity six months in advance, a tool for selling catastrophe bonds and other products to investors.
There was also Tom Knutson, the National Oceanic and Atmospheric Administration meteorologist whose research linking rising carbon dioxide levels to potential storm damage had led to censoring by the Bush White House.
Joining them was British climate physicist Mark Saunders, who argued that insurers could use model predictions from his insurance-industry-funded center to increase profits 30 percent.
The rock star in the room was Kerry Emanuel, the oracle of climate change from the Massachusetts Institute of Technology. Just two weeks before Katrina, one of the world’s leading scientific journals had published Emanuel’s concise but frightening paper claiming humanity had changed the weather and doubled the damage potential of cyclones worldwide.
Elsner said he anticipated a general and scholarly talk.
Instead, RMS asked four questions: How many more hurricanes would form from 2006 to 2010? How many would reach land? How many the Caribbean? And how long would the trend last?
Elsner’s discomfort grew as he realized RMS sought numbers to hard-wire into the computer program that helps insurers set rates.
“We’re not really in the business of making outlooks. We’re in the business of science,” he told the Herald-Tribune in a 2009 interview. “Once I realized what they were using it for, then I said, ‘Wait a minute.’ It’s one thing to talk about these things. It’s another to quantify it.”
Saunders did not respond to questions from the Herald-Tribune. Knutson said if RMS were to ask again, he would provide the same hurricane assessment he gave in 2005.
But Emanuel said he entered the discussion in 2005 “a little mystified” by what RMS was doing.
He now questions the credibility of any five-year prediction of major hurricanes. There is simply too much involved.
“Had I known then what I know now,” Emanuel said, “I would have been even more skeptical.”
Read the full post here, it’s mind blowing.