Inaugural expert climate prediction market for Atlantic hurricanes
CRUCIAL at Lancaster University is opening a prediction market to forecast the number of Atlantic hurricanes in the 2024 hurricane season. The market will allow participants 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. Participants will be invited to take part based on their expertise.
Teams wishing to take part in CRUCIAL prediction markets are encouraged make themselves known to the CRUCIAL via an Expression of Interest. The market will be opened after the 2023 hurricane season ends.
Hurricanes are the strongest and most destructive atmospheric events, with widespread effects across agriculture, wildlife, humans, and property. August-end Hurricane Idalia destroyed crops, dispersed flamingos from Florida to Ohio, killed 4 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. At the time of writing, Hurricane Lee is bringing strong winds and coastal flooding to the New England coast.
Recent research links elevated ocean temperatures with increased hurricane power. The summer of 2023 is the hottest on record, with North Atlantic sea-surface temperatures breaking previous record highs. The number and intensity of hurricanes is being affected accordingly.
The CRUCIAL initiative – a collaboration between researchers at the universities of Lancaster and Exeter – aims to demonstrate how sponsored prediction markets with expert participants can be used to forecast climate risks by efficiently aggregating diverse expertise and information, and in doing so, how they can be used as a mechanism to allocate funding for climate forecasting in a performance-driven way.