Weatherbill is one such startup. Founded three and a half years ago by Google expatriates, it lets anyone use their Web site to quickly create weather insurance for almost anything. Type in the thing you're trying to insure—say, an Iowa county fair in the third week of July—and the Weatherbill system calculates the probability of what the local weather will be like up to two years out, down to a 100-mile-wide area. It then uses that guess to instantly price a weather future or insurance contract. CEO Dave Friedberg told me Weatherbill had already sold contracts to the likes of the U.S. Open, and that he envisions worldwide opportunities: Global agriculture suffers billions in weather-related losses each year, for example, yet many countries don't have any institutions offering easy weather insurance. That's especially true for countries likely to be the first to experience the dire consequences of climate change, such as coastal regions of Asia or Latin America.
"If you think about Brazil, their two biggest industries are mining and agriculture," Friedberg says. "That's billions of dollars, and there's a massive market for developing crop insurance. If we can figure out agriculture and do it right, the opportunity is huge to go country by country." Does he believe that global warming is already noticeable? "Oh yeah," he says. In just the three years that Weatherbill has been collecting data, extreme weather events have risen 8 percent.
One of the big political questions of climate change is how far we've gone: Have we passed a tipping point of no return? Has the atmosphere already accumulated such high levels of greenhouse gases that even if we manage to cut back on emissions, we'll still wind up with a globe so much hotter that everyday life will change significantly? One emerging sector built on the assumption that we have is the "adaptation marketplace"— firms offering new products and services to help companies and cities cope with changes. A 2009 study by Oxfam identified seven potentially lucrative adaptation areas, such as water management and disaster preparation; one firm in this field—the Minneapolis-based Pentair Inc., which makes pumps and filtration systems—has soared to $3.35 billion in annual revenues, partly due to contracts from the Army Corps of Engineers to provide massive pumps that will protect New Orleans against another Katrina. Another firm, North Carolina's WeatherPredict, has developed a technique to retrofit roofs with aerodynamic edges, reducing the damage they sustain in hurricane winds. Firms that produce genetically engineered crops are also predicting they'll reap profits from climate change: Monsanto, Bayer, BASF, and their sister firms have registered 55 worldwide patents for "climate ready" seeds designed to thrive in conditions of drought or other stress, according to a 2008 report by ETC Group, an environmental advocacy organization.
Will all this climate-propelled economic activity be good for the planet? Sure, it can be satisfying to see some major CEOs agree that climate change is a real and present danger. But many environmentalists predict that the flurry of new economic activity will create its own new problems.
The melting Arctic, in particular, gives many observers the willies. It's likely to see an explosion in seabed oil-and-gas exploration and tourism. (Cargo shipping, interestingly, is likely to increase at a slower rate, partly because cargo ships ferrying "just in time" products can't abide the delays that even small ice floes would cause—and nobody thinks the Arctic will be entirely ice-free for 100 years or more.) Arctic experts—and the Navy—predict a catastrophe the first time a tourist vessel or oil tanker hits an iceberg and cracks up. "Tourist vessels aren't ice-hardened, and in the polar regions "there's no search and rescue or salvage," standing by says Lawson Brigham, a University of Alaska professor who chaired the Arctic Marine Shipping Assessment, a four-year study of how the commercial activity will progress in the warming north. "The water's near freezing. All you need is one good Titanic."
Other realms of climate-change commerce aren't much prettier when you look at them closely. In agriculture, the advent of climate-ready crops is clearly useful, maybe even crucial, for adaption. But it also concentrates ever more power in the hands of a small coterie of firms that own the patents to drought-resistant seeds, and the cost could cause serious hardship in the desperately poor countries of Asia or Africa, where the seeds might be most needed.
And it's also true that the number of climate visionaries in industry is still quite small. Certainly, companies with skin in the game are preparing for a warmer world. But as the McKinsey report found, they're in the minority. The grand majority are deeply myopic, focused narrowly on goosing profits in the next quarter—who cares what'll happen 10 years from now? (Read Felix Salmon on what makes most businesses so shortsighted here.) In a sense, that makes them a mildly agnostic force. When climate change finally does impinge on their business, they'll probably take action to adapt to it. But it also means that if they can see a short-term profit from fighting against climate science and sowing doubt, they'll do that, too. This is precisely what's still happening in the energy industry, where many firms that pay lip service to the reality of climate change also quietly funnel millions to lobbyists who fight ferociously to prevent Congress from passing laws that curtail CO2 emissions.
"We all know big companies who are doing all this green stuff, and their lobbyists are trying to kill the carbon bill as quickly as they can," says Mindy Lubber, president of Boston-based CERES, an association of environment-minded investors whose members have $10 trillion under management.
It may be that the corrective force comes not from inside corporations, but from investors. Many large investors, such as the California State Teachers' Retirement System—the nation's second-largest public-pension fund—have begun demanding that firms examine and disclose any potential risks from global warming. Shareholder resolutions demanding action on climate change have nearly doubled in the last two years, rising from about 55 in 2007 to 99 in 2009, Lubber notes. In February, the Securities and Exchange Commission issued guidelines requiring that publicly traded firms better disclose their climate-change risk, including potential "physical" risks.
"Anyone that's building out new manufacturing facilities without working out water shortages related to climate change is getting itself into trouble," Lubber adds. "Or anyone that's building on waterfront property." Another common request from shareholder resolutions is for companies to calculate the cost of their carbon footprint. Even if electric utilities and the U.S. Chamber of Commerce are fighting against carbon-limiting legislation, investors seem to believe it is inevitable—indeed, they evidently think the government might cap carbon even in the next few years, which could dramatically increase the cost of electricity.