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Solstice greetings: market makers
June 20, 2024, 4:51 pm ET
June 20, 2024

This spring, Akshat Rathi, a reporter fascinated by business and the problem of climate change, released a book called Climate Capitalism. Rathi, who writes for Bloomberg, asks a specific version of the question I have spent the past three decades exploring: How can governments, communities, and businesses work together to create good outcomes for society? The book is upbeat, going from one example to another of government policy enabling businesses to make money doing good things. I am happy to read success stories, but despite the book’s title, I was disappointed to discover that it is actually not about climate change. It’s just about carbon and capitalism.

The book’s subtitle, Winning the Race to Zero Emissions and Solving the Crisis of Our Age, reflects the dominant mindsets of business, governments, and climate activists regarding climate change: It’s all about emissions, and the optimistic verbs are “winning” and “solving.” The implicit alternatives are “losing” and “failing.” It’s a simplistic story: Either the world will tip into permanent misery, or we will enjoy a glorious victory.

My colleagues and I sometimes show these two images to illustrate the predominant narratives in climate communication:

The simplicity of winning vs. losing is appealing when selling anything from books to policies to weight loss schemes, especially to Americans who love superheroes, fast food, fad diets, and happy endings while avoiding politics, cooking, and the kinds of tragic, unresolved, moving stories that sustained cultures for millennia. Perhaps most toxic are poorly thought-out visions of “winning.” As a favorite colleague of mine used to say, “I see the picture. It’s clear. But can you show me the movie?” Last year, I was onstage with comedians Estaban Gast and Pratima Mani, who made the observation that the house on the left, the one with the climate solutions, looks like the one from the South Korean movie Parasite, in which absolutely terrible things happen.

The main lesson I’ve learned from researching history and economics, as well as living, working, lending, and investing in a wide variety of places, is that almost all of life, instead of conforming to winning-losing or good-evil narratives, is in the messy in-between. Moreover, I have found that societies, governments, and businesses that have limited, idealized views and utopian visions, that look away from the messiness, that don’t find it interesting—indeed that don’t find it to be the worthwhile, connecting, grounding stuff of well-lived life in community—tend to fail or cause great harm. They wind up losing a game that never was a game to start with and didn’t need to be lost. 

The climate has already changed and will change further as carbon emissions continue to alter the atmosphere, yet governments, entrepreneurs, investors, and activists have been a mix of unaware, reluctant, and resistant to even start talking about adaptation. In the past year, as the atmosphere reached 1.5°C of warming (the ambitious threshold that was chosen as the border between success and failure), I have heard people invoke “win” and “solve” in increasingly bizarre ways, insisting that the present reality is an avoidable future. 

We did not win. We did not solve climate change. We are also not even prepared for the present, let alone the futures that are probable. Yet we also have not lost or failed. Yes, climate change is worse than it could have been, and we need to decarbonize swiftly and permanently, but focusing exclusively on the causes of climate change and not the effects is now a terrible, delusional strategy. As in our own individual lives, we face hard choices, but accepting reality, assessing risks, planning, and preparing are constructive, participatory, forward-looking approaches to life. Indeed, these are the kinds of skills we want children to have. Just as we want kids to be prepared and adaptable, we could take a good look at the current climate and the probable futures coming our way to moderate and avoid harm and find opportunities to live better. That’s adaptation, not an admission of defeat. 

Over the next few seasons, I will explore the messy reality that adaptation is difficult for markets to address and that markets are essential to addressing adaptation. I will explore how we might enable communities, governments, businesses, and their complex interaction in markets to reduce risks and increase the chances that the future is good. I’m going to wade into this complexity by starting in a capitalist utopia.

Wouldn’t it be nice?

It would be amazing to live in a world in which businesses operating in unfettered markets solved all of society’s problems. Governments’ only job would be to enforce property rights, and the owners of labor and capital would be free to interact frictionlessly to reach fair, efficient, prosperous ends. 

This is such an appealing worldview to some people because of its philosophical simplicity and because, with prices resolving all disagreements, people would not have to engage in the messy social interactions known as politics. I think it’s important to start an inquiry into adaptation from this extreme perspective both because it is clarifying and because libertarianism is popular among wealthy, powerful people.

I spent most of my professional life working with people whose only field of study had been business. They didn’t like government and would often bristle when I brought it up, even when I was trying to help them see an opportunity to make more money (or lose less money). Indeed, after showing an investor at my old firm that his investment thesis for a finance company was based on a big, risky assumption about how the US government would behave, he said, “I went to business school so that I would never have to think about government.” 

A few of my libertarian colleagues tried to liberate my mind by recommending that I read the essay “I, Pencil,” which the author, Leonard E. Read, wrote in 1958 from the perspective of a pencil. Pencil is an immodest, loquacious narrator: 

I, Pencil, simple though I appear to be, merit your wonder and awe, a claim I shall attempt to prove. In fact, if you can understand me—no, that’s too much to ask of anyone—if you can become aware of the miraculousness which I symbolize, you can help save the freedom mankind is so unhappily losing.

Pencil explains that no one actually knows how to make a pencil, because too much diverse work went into each pencil for it to have been designed by a central planner:

My family tree begins with what in fact is a tree, a cedar of straight grain that grows in Northern California and Oregon. Now contemplate all the saws and trucks and rope and the countless other gear used in harvesting and carting the cedar logs to the railroad siding. Think of all the persons and the numberless skills that went into their fabrication: the mining of ore, the making of steel and its refinement into saws, axes, motors; the growing of hemp and bringing it through all the stages to heavy and strong rope; the logging camps with their beds and mess halls, the cookery and the raising of all the foods. Why, untold thousands of persons had a hand in every cup of coffee the loggers drink!

Pencil goes on, over several paragraphs, to list myriad inputs and processes involved in pencil-making. And, to fully embrace Pencil’s enthusiasm, I agree. I absolutely get it. Markets are amazing! Businesses can do incredible things! In fact, I would go even further, because, while Pencil loves markets, it doesn’t think pencils are all that interesting. I think pencils are really cool! Moreover, I spent a lot of time in Russia in the early 1990s and China in the early 2000s and saw up close how centrally planned economies consistently produced enormous waste, destroyed the natural world, and crushed personal freedom.

The problem is that while the creation of the pencil illuminates the majesty of markets providing a quality product at a low price, Pencil doesn’t explain why people want pencils in the first place. As I said to one of my colleagues who recommended the essay, “‘I, Pencil’ works. ‘I, Grade School’ wouldn’t work so well.” Once community-funded, government-operated universal education was a norm that every town and city in the world adopted, markets could provide the pencils, papers, books, and backpacks. Without literacy, however, there wouldn’t be much of a pencil market.

Twelve thousand years of climate stability enabled a kind of climate illiteracy. Assured by the knowledge that weather patterns were stable over centuries, the natural world gradually became a landscape, a backdrop, almost a constant. Indeed, a bit more than a century since countries first set out to teach all of their citizens to read, many of us now work almost entirely in symbols on screens. Pencils are archaic in their materiality. William Nordhaus, who won a Nobel Prize for his work on climate economics, assured readers that climate change wouldn’t be very costly because only a small percentage of GDP is generated by outdoor work. Safe in our houses, cars, offices, and factories, we watched the weather report on TV so we could decide what to wear and left extreme events—acts of God—to risk specialists like actuaries and insurers whom we derided as boring worrywarts. 

So here we are. The atmosphere is about 1.5°C above the temperature that enabled civilization, and we are acting as if climate change is a future to be avoided, not one to be adapted to and planned for. Our infrastructure, financial systems, and cultures are all outdated. Literacy created demand not only for pencils, pens, paper, books, and magazines, etc. but also for stories, for ways of learning, for processes and cultures. We now need to create demand for climate adaptation goods, services, processes, and cultures. To do that, we will need to start by acknowledging that markets have always been bad at reducing systemic risk.

Risk is bad business

Free marketeers are true optimists. They are often motivated by a grand vision and often push away negative ideas. Indeed, when they hear people say that businesses might be heading us in a bad direction or that more government is necessary, libertarians can get loony. There’s an old New Yorker cartoon in which firefighters come to a burning home only to have the owner turn them away: “No thanks, I’m a libertarian.”

The Heritage Foundation, the influential free-market think tank, has produced scores of pieces about how climate change is nonsense or paranoia or a waste of money. My favorite version of this comes from an economist named Stephen Moore who, in 2018, tried to undermine climate science by insinuating that scientists claimed that the future would be bad to drum up business: “No one hires a fireman if there are no fires. No one hires a climate scientist (there are thousands of them now) if there is no catastrophic change in the weather.” 

I love this quote because a) it implies that in a world of several billion people, thousands of people (roughly one out of every million people) warning of impending danger must either be pathological pessimists, profiteers with a deceitful marketing scheme, or a corrupt political faction intending to undermine business, and b) it ignores the fact that people don’t hire firefighters when there’s a fire. Firefighters are hired by governments.

The history of fire departments provides an extremely insightful case study of market failure. After the Great Fire of 1666 in London, the city created the aptly named The Insurance Office, which, according to the International Risk Management Institute (IRMI), was the first formal insurance company. It was housed behind the Royal Exchange, London’s stock market. The Insurance Office employed brigades with equipment and badges. Soon private insurance companies sprung up imitating The Insurance Office, each with their own fire brigades. Here’s IRMI’s description of how this worked:

Company-owned brigades were not there for the protection of the public, they were specifically employed by their respective insurance companies. When a fire occurred, all the nearby fire brigades would rush to the fire, just in case it was their company that insured the building. If it wasn’t, they’d either leave or, more likely, stay to watch as observers.

It became obvious that there had to be a quick and easy way for these brigades to be able to identify the houses and buildings that their employers insured. The various insurance companies began issuing signs, called “firemarks,” to their policyholders. In England, where this all began, most of the firemarks were made out of tin. The company would issue them, and the policyholder would mount it under the eaves in the front of the house.

At best, the whole idea of insurer-owned fire departments was cumbersome; at worst, it was downright disastrous. Company A’s fire department might watch a house insured by Company B burn today, and next week Company B’s department might watch one of Company A’s go up in smoke. Not very efficient.

The solution, of course, was to have municipal―not private―fire departments. A deal was worked out, and all the insurance companies donated their equipment to the city. The city hired the firefighters, who were stationed at various locations around the city. Their job was to fight fire, whether the building was insured or not.

Over the ensuing centuries, insurers repeatedly found that using only market forces led to too much systemic risk. There were dozens of “Great Fires” that wiped out insurance balance sheets. Each time, private insurers insisted that governments increase regulations and services, especially building codes and fire standards. Over time, governments provided rules, and businesses provided and improved products like smoke detectors, alarm systems, sprinklers, fireproof materials, and fire gear. In response to climate change, the London Fire Brigade recently purchased inflatable boats because they are often having to save people in flooded residences.

The professions most attuned to risk are early to detect when businesses, governments, and individuals are taking assumptions of stability too far. A couple of years ago, leaders at a hedge fund that had famously anticipated the 2008/9 financial crisis reached out to tell me that they really appreciated Probable Futures and my work. I asked what they appreciated about it. “We love free markets, and we can see that every bit worse climate change gets, the more crises there will be. In a crisis, the government has to step in. If we don’t deal with climate change, governments will be forced to grow, and markets will shrink.” They saw our modest nonprofit as a bulwark against the collapse of the capitalism they loved.

What we don’t talk about when we talk about climate change

When I started working in finance 25 years ago, the atmospheric temperature had barely changed. The weather wasn’t much different from the past, and the whole “climate change” thing felt hypothetical. The few times the topic ever came up in the investment business was if someone mentioned carbon emissions. The oil analysts acted defensive and muttered about Al Gore. “Just buy Exxon” was solid guidance from the wise old portfolio manager who confidently said that a warmer atmosphere would be great for humans anyhow. I stayed out of it. 

Then, about 10 years ago, the changes in weather were getting harder to miss, yet the conversation didn’t change. I had gotten good at finding new frameworks or sources of data that could reveal mispricing in the markets, especially if businesspeople were likely to have a bias. I dug into climate science and discovered that it was mankind’s first good forecast. I found it curious that no one was incorporating climate science into their decision-making. People in finance were ignoring truly excellent models whose predictions had been accurate for decades. After a few years of trying to get colleagues and clients to see a business opportunity, I left finance to see if I could help build the groundwork for adaptation.

I am happy to say that the work, although slow, is gaining traction. My colleagues and I are being invited to make climate science more vivid, resonant, and useful. People see—often for the first time—that what they had understood to be a carbon accounting exercise or a vague, political, existential fight is actually a change in the climate that already poses serious risks. Even in conversations that I think are about adaptation, however, I often discover that my interlocutor has been programmed to only associate climate with carbon. In Climate Capitalism, Rathi tells one story that captures this bizarre perspective perfectly. He visits a village in Southern India where a farmer named Srinivas, under the pressure of hotter, drier weather, has turned his farm over to developers who have covered his land in solar panels:

Farmers have tried to adapt by growing groundnut and yellow lentils, which can make do with the dwindling water supply. Those who can afford it have dug bore wells to use groundwater for irrigation. In the past ten years even that resource has come under threat. Many of the wells have dried up and there doesn’t seem to be an easy way to replenish the ancient reserves. “Sooner or later, climate change will turn the land barren,” said an advisor with Tumkur Science Center, a local educational charity.

Millions of farmers around the world today are having their lives upended as climate change renders vast stretches of land as fallow. The decades they spent tending the productive earth are coming to an end. A 2017 study found that nearly 60,000 Indian farmers have killed themselves in the last thirty years because of crop failures linked to climate change. The drying up of farmland around the world is likely to accelerate with every fraction of a degree of global warming, and soon those numbers could be orders of magnitude higher. It is one among thousands of examples where the worsening impacts of climate change are more acutely felt by the poor and most vulnerable.

No single solution can help all farmers. Some, like Srinivas, could benefit from the transition to clean energy.

The string of ideas in the above paragraphs should be disorienting: Planting new crops is casually dismissed, finding new sources of water is not easy, there is no further mention of the many other things farmers (and their families and non-farming community members) might do, there is a hopeless forecast of misery, and then there is the possibility of solar panels. I don’t want to be crass, but a literal reading of this section offers the transition to clean energy and suicide as farmers’ two concrete choices. 

I get why tech moguls who live in abstractions might think this way, but Rathi is a smart, thoughtful person who clearly cares deeply about the people of India. I wondered why Climate Capitalism did not explore how businesses and markets could help people better prepare for and adapt to a changing climate. Vexed, I searched for interviews he gave on the book tour. I discovered that Rathi had recently participated in a live podcast in front of an audience at Princeton. The more than hour-long conversation between the host, a venture capitalist, and Rathi was like the book: no mention of adaptation. Finally, at the very end, an audience member asked how climate capitalism would work in poorer places. Rathi replied: 

The most clear way I’ve understood it is [from] this economist from Barbados, Avinash Persaud: “Think about climate finance in three buckets: The biggest bucket should be stuff where “if you put in money, you get more money out.” Most of these will be mitigation projects: Solar plants will produce some amount of profit—never enough for an oil and gas company, but enough for some people—and so, you do a lot of mitigation with that part. And that part should really be policy-driven private capital. 

The middle part, you can call it adaptation, where it is really the role of government to borrow from future people to fund the projects today. So, if [the] Bahamas knows that a particular adaptation project in a few years time will actually save it from dealing with impacts from hurricanes or whatever, then it can/should in principle have bonds that go to the private market that are 30-, 40-, maybe 100-years long—which do exist—and use that money to build those projects now. That’s the second bucket. 

The smallest bucket should be the loss and damage bucket where the rich countries have to just pay poor countries for the damage that is immediately caused as a way of giving them relief because the damage is just too much and they are not responsible for it. 

Now how you make it work within a capitalist framework is actually very hard, and there are actually solutions. There is insurance available for political risk that tons of companies take when they go and put projects in developing countries. So, it’s possible to do, but it requires motivation and it requires these international institutions to be reformed.

There was my answer: In Rathi’s telling, adaptation, the second bucket, is a government concern. He doesn’t see it as a part of capitalism. 

Rathi’s adaptation vision, borrowed from Persaud, presumes that: 

  1. Local/regional/state governments know the probabilities and impacts of all of the potential “hurricanes or whatevers” that might come along.
  2. Local/regional/state governments can anticipate economic activity and tax revenues 30-, 40-, and even 100 years into the future, both with and without the seawall, so it can accurately value building the seawall vs. not doing so.
  3. The positive gain from the seawall will enable future citizens to pay back the principal and decades of interest on the loans (and that they will still be there, honoring decades-old debts).
  4. Investors will lend to governments of all kinds for projects that don’t deliver revenue with 30-, 40-, or even 100-year terms at an attractive interest rate. Just to level-set, there has never been a market for 40- or 100-year bonds in poor countries. And that was without climate change.

I share this example because Rathi accurately represents the state of businesspeople and activists who think and talk about climate: The focus is always on decarbonization, and when forced to talk about adaptation, they immediately talk about huge projects like seawalls or massive, desperate actions like forced migration. It’s either nothing changes or everyone moves. It’s all totally unrealistic.

Here are some things that are happening now:

  • Big tech companies are pledging net-zero while building data centers (which are essentially cooling centers for hot computers) in Texas, yet they are not consulting climate change maps to see just how hot or dry it will be. 
  • Millions of heat pumps are being installed using new climate-policy money, without reference to the weather they will have to deal with. 
  • Windmills are going to places that people say “are windy” without checking to see if maybe they “were windy and might not be in the future.” 
  • Leading property companies are building nothing but “green” buildings and are putting them in floodplains. 
  • I have had multiple people who work in clean energy and whom I really admire tell me, “I stopped paying attention to climate science years ago. It was too depressing. We just need to solve it.”

For 12,000 years, the earth’s climate was perfect for humans. There were wide expanses of temperate land, predictable seasonal patterns, and—amazingly—nowhere on the planet was ever too hot for the human body. It was perfect for us. And it no longer is. It’s a profound loss. It will be challenging and often costly to replace what nature gave us for free, to adapt to new limitations, and to find new ways of living well. But that’s a challenge all of us who are lucky enough to live past 25 (and certainly past 40) face as our bodies grow older. 

I have come to think of this phase of humanity as the end of a 12,000-year-long privileged childhood when many of us could afford to be oblivious to the forces that made life so pleasant. Just as aging can be enjoyable, interesting, and enriching for people who find ways to enjoy every age, we can set civilization up for a very long, worthwhile adulthood if we both decarbonize quickly and learn to adapt and plan. Who knows, maybe civilization can actually live forever if it is sufficiently climate literate.   

As with aging and illness, the only thing more dangerous than ignoring a problem might be insisting that it doesn’t exist.

From free markets to suppression  

Governments look out for their own constituents. Current asset owners in Florida are freaking out as first reinsurers, then insurers, and now lenders are pulling capital away due to increased physical risks. As the hedge fund leaders predicted, Floridians are demanding that the state government prop up their home values.

The state government is squelching discussions of climate change—insisting that insurance companies are foolish or politically motivated when they leave the state—and now the state is prohibiting local governments from creating policies for workers’ health as dangerous heat becomes common. The calls of “It’s not happening!” are getting more shrill. History tells us not to be surprised. Many extremely “pro-business” governments have quickly turned authoritarian when external markets start signaling that something is wrong. Here’s a screenshot from a local Floridian news outlet. Swap out “Florida” for a failing dictatorship like “Venezuela” and it works just as well (note that the ad that appears with the article offers a similarly plausible solution to a difficult problem):

I have written and spoken a lot about the perils that face Florida and the resistance by Florida’s state government to productively face them. I am sometimes told that I am “being mean” to the Floridian homeowners because they will suffer if/when their houses lose value. I explain to those people that I am trying to encourage healthy markets, not prop up specific businesses, and I am trying to help citizens, not existing homeowners in particular. I sympathize with Floridian homeowners who overpaid for their homes, but housing is a market, and every transaction has two parties. “Being nice” to current owners who want to sell is equivalently “being mean” to potential future buyers. Pretending that Floridian real estate isn’t facing existential risks inflates the current—unprepared—housing market and discourages spending money on adaptation.

While politicians look out for their current residents and influential donors, the people elsewhere in the world who might be considering buying Floridian real estate aren’t an organized community and have no political representation, so no government will help them out. There is no incentive for businesses to advertise “Stay where you are,” whereas ads encouraging you to move to Florida abound. This spring, I received a series of emails from a broker whose email address was Here’s one of them:

Hi Spencer,

Over the years, I’ve helped many professionals from Boston purchase second homes, relocate, and invest in Miami & South Florida.

Many have seen huge gains through tax benefits, an expansion of real estate/equity, and appreciation in such a rapidly growing market. 

Have you considered a move or second residence? 

Happy to be a resource in whatever capacity I can. 

I decided to find out more about this broker who emailed me. I wasn’t surprised to find out that he doesn’t even live in Florida. It’s just that selling Florida property has been a good business, and the internet, which is currently doing a lousy job of communicating climate risks, is doing a fabulous job of helping people to market real estate to underinformed buyers.

Adaptation markets

Older people often act sheepish when they tell me that they spend the winter in Florida. I tell them that it sounds like a good idea. It’s still nice—aging bodies do better with warm air, and all of us appreciate sunshine. I just recommend that they rent. Let wealthy, defiant, ever-young billionaires like Tom Brady and Jeff Bezos (who are neighbors on an island in Miami known as Billionaire Bunker) buy the land. Seriously, I think Florida could age and adapt gracefully if all of the land was sold to rich people. 

Long-term prospects for the peninsula are essentially hopeless, as sea level rise will go from manageable to expensive to overwhelming, but there are financial models for managing an asset in terminal decline. Here’s a suggestion libertarians and septuagenarians should both consider: Private equity firms funded by wealthy investors could buy all of Florida’s real estate and then rent it to people who want to live there seasonally. Currently, most residents of Florida own their homes, and those homes are almost always their largest asset, which is why they are so worried about a decline in home values. If well-diversified investors bought all of the land, the risks would be less concentrated in the hands of people who can’t afford risk. Rents would have to compensate the investors for the cost of a lot of housing being empty part of the year, but the assets would produce cash flows and would have a distinctive risk profile, both of which should appeal to investors. 

The price of Florida real estate would be set by risk-aware investors who have access to analytical tools, not by the often-irrational real estate market in which brokers hype properties to overwhelmed individuals. In finance, this is called a transfer of risk. There could be many benefits: Floridian residents would have a sense of how they should plan their futures, aging people who didn’t expect to live a long time could retire there, and migratory types could keep spending winters there. I am not arguing that this is a solution, but I offer it to demonstrate the kind of creative thinking and financing that could enable adaptation. Obviously, this kind of transition would be difficult, but we can consider it because governments invested in risk data when businesses wouldn’t.

Free information can turn good government into good markets

The more time I spend with climate science, the more I marvel at how spectacular and valuable it is. Take a minute to appreciate that we understand how our planet’s systems work: We have a forecast of the future, and we know how to avoid wrecking our planet. Scientists working in research laboratories and universities around the globe figured the system out and coordinated with one another so that their results could be combined. And the whole thing was paid for by governments. For-profit companies never would have paid for this kind of research. Who would their customers be? How would they sell it? 

One ironic thing about libertarians is how much they rely on government statistics. Labor, commerce, and finance ministries along with central banks collect and publish everything from inflation estimates to labor statistics to interest rates and money aggregates, which libertarians use in their efforts to discredit government. Indeed, the whole financial market runs on free government data. In praising “I, Pencil,” Milton Friedman said that the essay demonstrated “the importance of dispersed knowledge and the role of the price system in communicating information that [in F.A. Hayek’s words] ‘will make the individuals do the desirable things without anyone having to tell them what to do.’ ” Friedman knew that markets with more information work better. And in the healthiest markets, governments provide free, high-quality information to buyers, sellers, lenders, lawyers, citizens, tourists, CEOs, activists, children…literally everyone.

By my estimate, all of the science that led to these climate models cost less than 0.002% of the current estimate of global net worth. Climate scientists have done marvelous work, but they did a lousy job of getting the information they discovered into markets. That’s why we started Probable Futures: to take high-quality climate information that had already been paid for by governments and make it easily accessible, well-designed, and compellingly written so that businesses, governments, and everyone else could learn from it and use it. We call Probable Futures a climate literacy initiative. If you can read and take the time to read our handbook, you can understand the basics of our climate. That understanding can make the world more interesting and less confusing, and—crucially—if everyone is climate literate, more people can come up with and share stories, ideas, investment plans, business ideas, political agendas, regulatory reforms, etc., to help us buy, sell, lend, litigate, play, create, advocate, eat, and generally live well in a changing climate. If only a small number of people are climate literate, however, markets will fail miserably at reducing risks and generating prosperity.

Fire sales

Some venture capital–funded businesses are cropping up to monetize information about fires, floods, and other events that are growing more common and costly as the atmosphere warms. This nascent industry doesn’t offer climate literacy but “climate intelligence.” The entrepreneurs’ and investors’ assumption is that there is a market of asset owners who will pay someone to tell them what their risks are but who are unlikely to learn how to assess those risks themselves. It’s a bit like the world before universal literacy: People who could read and write sold their services, writing letters and reading them aloud. It was a way to make a living, but it wasn’t much of a market.

I have seen the oddness of creating climate intelligence businesses in a climate illiterate society up close, as several entrepreneurs and early customers have sought me out. For example, a few years ago I got a call from someone at Google’s confusingly named endeavor, X, The Moonshot Factory.1 The Moonshooter explained that Google sets aside a portion of its giant pile of advertising revenue to “create new radical technologies to solve some of the world’s hardest problems.” Unlike government funding of literal space exploration (whose goals were to learn more about our world and surroundings without expectations of revenues exceeding costs), however, the Moonshooter told me that every Moonshot had to target 20% returns on capital to Google shareholders.

Google, as we all know, collects data about almost everyone and everything everywhere in order to produce advertising revenue. The Moonshooter’s team was thinking about how Google’s surveillance could be combined with climate model data to assess risks from things like wildfire with tremendous accuracy. The Moonshooter explained that they were thinking of launching a business that could sell fire risk information to wealthy homeowners in fire-prone areas.

I explained that the goal of Probable Futures was to make local climate data accessible for free to anyone anywhere in the world. They replied, “That is an amazing business model!” I explained that Probable Futures wasn’t a business at all. We built it as a gift, a public service. “That is such a disruptive business model!” they exclaimed. 

By the end of our call, I sympathized with the Moonshooter. They were trying to do something good in the world within the utopian constraints of venture capital financing. They, however, seemed to find the conversation slightly bewildering. Finally they said, “I guess I just have one more question: If you’re not a business, why did you take my call?” I replied that we were building Probable Futures as a nonprofit organization, in hopes that it would be useful to other nonprofits, to governments, to citizens, and even to for-profit companies, like the wildfire risk tool for wealthy homeowners they were considering. I told them that I thought it would be hard to sell precise, expensive risk data without free, public data to motivate people to understand their risks. If people look at the drought and wildfire maps on the Probable Futures platform and conclude that they would benefit from more specialized information, they might find the Moonshot project valuable and pay for it, making the people better off, and Google richer. If so, hooray for markets! 

I suggested that, since Google probably knows everyone’s risk better than they themselves do, a real moonshot would be to simply make everything they know public. The Moonshooter told me that was too disruptive. Instead, they recently released a product that gives rapid, accurate information about what’s happening on the ground during and after disasters like wildfires, floods, and tornados. The case study on their website is about helping the US National Guard target its disaster relief. 

I worry that these are the markets today’s “climate capitalism” are implicitly incubating: ones that are like the early fire brigades. When communities are hit by crises that could have been anticipated, diminished, or even avoided, selling better data to expanding, scrambling, often-overwhelmed governments may be a good business, but it will be one of the few. If, instead, organizations and communities get some climate literacy, who knows what kinds of cool, useful things people will dream up and figure out how to share, give, buy, and sell. 

Today, Probable Futures materials are front and center in perhaps the two most capitalist institutions in the world: Our tools and data are a core component of executive education at Harvard Business School, and J.P.Morgan has brought us in to teach hundreds of board members of large corporations around the world that climate risk is their responsibility. Simultaneously, we are collaborating with United Way, a charitable organization that is often a connector in communities and a first responder in crises, and with the Hollywood Climate Summit to help the movie industry tell stories that more accurately reflect life in a changing climate. In all of these cases, we are helping people see that adapting to climate change is already relevant in their work, and that if they look closely—and sharpen their pencils—they can do a lot of good for their organizations, communities, and the generations to come. I’m sure you can too.

I hope you enjoy this solstice, and I look forward to sharing more thoughts with you on the September equinox.




1 Technically, X, The Moonshot Factory is a division of Alphabet, which is the parent company of Google. To avoid using an acronym like XtheMF, I simply refer to the whole thing as Google.

References and readings:

Milton Friedman “I, Pencil” video
Rathi, Akshat. Climate Capitalism: Winning the Race to Zero Emissions and Solving the Crisis of Our Age. Greystone Books.