Extreme weather is boosting the forecasting business

What's the weather like in Papua New Guinea?

That's what one man wanted to know when he reached out to Meteomatics, a private weather forecasting company in Saint Gallen, Switzerland. He was trying to replicate the climate of the Oceanic island nation back in France, for the iguanas he was raising there.

"That was kind of a weird request," Alexander Stauch, Meteomatics' head of marketing, told DW.

The Swiss-based forecasting company is used to unusual requests. Their weather forecasting software and drones are used around the globe by festival planners, the defense industry, and everybody in between.

Weather forecasting is of growing importance in times when extreme weather is becoming the norm. While many governments are still publicly committed to capping global warming at 1.5 degrees Celsius above pre-industrial levels, there is a growing consensus that humans will have to adapt to the extreme weather events that come with a warming planet.

Economic losses from weather have gone up

Humans can't control the weather (yet). But scientists can and do predict what the weather will do, and with ever-increasing accuracy. Recent research shows that a five-day forecast today is as accurate as a one-day forecast was in the 1980s. Forecasts are a vital tool for saving lives, but they can also save governments and businesses from catastrophic financial loss in the event of extreme weather.

The number of human deaths from extreme weather, like flooding, cyclones and drought, has decreased over the last half of a century, according to a 2023 study from the World Meteorological Organization (WMO). This was mostly due to the implementation of multi-hazard early warning systems.

Economic losses, meanwhile, have gone up. A 2021 report by the World Bank estimates that improving the collection and international exchange of weather data will deliver additional socioeconomic benefits worth more than $5 billion (€4.7 billion) a year.

Companies have already caught on. Germany's national railway company Deutsche Bahn told DW it was improving its own forecasting portal to have better predictions related to floods and bush fires, two types of natural disasters that historically posed little problem in Germany, but which are becoming a greater risk.

Companies find value in forecasts

Weather forecasts aren't only about anticipating damage. The technology available today means they can also be used to optimize business. For example, weather data can be factored into supply chain management to optimize shipping routes. One Japanese carmaker uses Meteomatics' tech to adjust the energy consumption in their production facilities based on the current weather, Stauch says.

"The strongest revenue stream comes from the energy sector, mainly renewable energies, of course, because they're highly dependent on accurate weather data," he explains.

For example, wind and solar energy producers can adjust their turbines and panels based on sun and wind forecasts to optimize production. Energy and other commodity traders are also using forecasting technology to make business decisions based on the weather.

Demand for hyperlocal data is increasing

Meteomatics, which turned 10 last year, says it has doubled its customer base in the last two years and that it recently opened an office in the US. And it's not the only player seeing a growing interest in its services. 

"The number of commercial customers has increased over the years significantly," Florian Pappenberg, head of forecasts at the European Centre for Medium-Range Weather Forecasts (ECMWF), told DW. The ECMWF is an intergovernmental organization that provides global weather forecasts out to around two weeks.

"What you see [in the industry] is more specialized applications for specific purposes, such as you want to forecast the crop yield in eight American cities because it determines the market price," said Pappenberg, picking an example at random.

Retailers are also using weather data to anticipate consumer buying trends. In a current campaign aimed at marketers, forecasting and technology company The Weather Company calls weather "the original influencer."

"Weather affects how we feel, what we try and what we buy," the ad says.

Vulnerable economies left out in the rain

While the technology has improved, access to it hasn't improved equally around the globe. Forecasting data and technology in industrialized countries is much more advanced than in developing countries. This poses a particular problem because developing countries are also much more vulnerable to damage from extreme weather.

According to the WMO report, since 1970, the vast majority of weather disasters in the most developed countries led to reported economic losses of less than 0.1% of that country's GDP. The least developed countries were much more likely to experience disasters resulting in reported economic losses of more than 5% of GDP, with some causing losses up to 30%. Some disasters in small island countries caused economic losses above 100% of GDP.

This is having an understandable effect on businesses most vulnerable to the weather.

"Farmers are facing extremely rough and rugged conditions," Ravi Kumar, a member of the working group on food security and climate change for the World Farmers' Organization (WFO), told DW.

Better forecasting could help deal with hunger crisis

In India, for example, many farmers are abandoning their landand seeking more lucrative careers because the extreme rain and drought are becoming too difficult to manage. Within the context of a global hunger crisis, the development is worrying.

"Farmers need tools and guidance to effectively translate forecast data into actionable decisions," said Kumar. 

Local forecast offerings exist, but the infrastructure for weather data collection in many developing countries is far behind what is used in industrialized nations. This makes it difficult for forecasting companies to provide these areas with the services they need so badly, even if they want to. 

ECMWF says it makes its services close to free for these markets and that they have a yearly program to train forecasters from developing countries on how to work with ECMWF data. 

The WFO, meanwhile, is advocating to develop better technological solutions for farmers in developing countries. That includes better forecasting systems, offered in local languages and with easy-to-use interfaces, to help farmers know when to plant their seedlings or protect their livestock. But someone needs to pay for it. 

"Making climate finance available is extremely important," said Kumar.