Before the 2024 Atlantic hurricane season began the consensus was that it would be one of the most active seasons in history. However, a prolonged quiet period during late August and early September possibly led forecasters to question these predictions, before later activity fulfilled the season’s high expectations. The CRUCIAL initiative ran a “prediction market” during 2024 which allowed experts to bet on the number of hurricanes. Prices in this market provide an insight into how views changed during the season. Prediction markets can efficiently aggregate the judgements of multiple experts and provide more up-to-date information than periodically issued forecasts.

This paper reports viability tests of prediction markets with highly granular, monthly UK rainfall and temperature joint outcome spaces. The experiments demonstrate these markets can aggregate the judgments of experts with relevant expertise, and suggest similarly structured markets, with longer horizons, could provide a mechanism to produce credible forecasts of climate-related risks for policy making, planning, and risk disclosure.

This article examines the performance of 24 prediction markets for climate-related variables that have been run over the past five years. The markets had horizons of 2 to 12 months. The predictions of the markets were consistent with good reliability, given the resolving power afforded by the sample size.

Forward-looking information about climate risks is critical for decision makers, but the provision and accuracy of such information is limited. Innovative prediction-market designs could provide a mechanism to enhance applied climate research in an incentive-compatible way.

A proposal for generating forward-looking climate-risk information with expert prediction markets.