The Future of Meteorology15 Dec , 2011 | 19
The Future of Meteorology still looks bright to me. Even though the weather job market is tough right now, I believe employers in meteorology will hire again. And I feel most of the jobs will come from a few specific sectors in meteorology. I believe the future of meteorology will lie in 3 core areas:
1) Weather Modeling (risk, renewable energy, and resolution)
2) Weather Derivatives and Insurance (hedging weather risk)
3) Private Weather Forecasting/Consulting for Corporations (being warned ahead of time)
As many of you know, 2011 is officially the worst year for weather damage in the US with 12 separate billion dollar weather disasters. You can read the full article in the Washington Post, here. NOAA also estimates that a third of our GDP utilizes weather data in some capacity for their operations and/or risk management.
2011 has definitely been a wake up call for many corporations, cities, utilities, and other business entities to take severe weather more seriously and better model it in their overall risk portfolio. So let me get into why I feel the 3 areas I listed above will be the future of meteorology. Let’s start with weather modeling.
1) Weather Modeling: I believe employers will continue to hire in areas of catastrophe risk modeling, weather modeling for the renewable space, and higher resolution modeling. Insurance companies and risk management companies continue to hire catastrophe risk modelers to assess weather risk for clients and government agencies worldwide. One of the top risk management companies, RMS, does hire meteorologists for severe weather modeling. Companies in all sorts of industries need to understand how weather can affect their business operations.
As the renewable sector continues to grow (and as long as Congress keeps providing major tax breaks for renewable energy companies), there will continue to be a demand for higher resolution weather modeling for the renewable space. I talked about this in my previous post about whether “computer models would take away wind meteorologist jobs”
According to a paper Marquis, the more precise and accurate the weather models are, power can be dispatched more efficiently from cities and utilities resulting in 1-4 billion dollars annually in savings overall. (ie generators will generate how much is required and not overuse)
2) Weather Derivatives and Insurance: I will be talking about Weather Derivatives and Insurance in depth in a separate post, but I’ll give you a brief introduction to it here. Bottom line, governments and corporations can hedge their weather risk in two ways: 1) Weather Insurance and 2) Weather Derivatives. I think Investopedia defines these terms the best and gives an excellent example. Investopedia says, “weather derivatives cover low risk, high-probability events, while weather insurance typically covers high risk, low probability events.
For example, “a company might use a weather derivative to hedge against a winter that forecasters think will be 5° F warmer than the historical average (a low-risk, high-probability event). In this case, the company knows its revenues would be affected by that kind of weather. But the same company would most likely purchase an insurance policy for protection against damages caused by a flood or hurricane (high-risk, low-probability events). “ (Source: Investopedia)
If you are a business whose operations and revenues are affected by the weather, it’s highly recommended you have one (or both) of these in place. I’ll discuss this in more detail soon and also point out how meteorologists may come into play in these sectors.
And last but not least…
3) Private Weather Forecasting/Consulting: As cities, states, utilities, companies, individuals, etc continue to realize that weather can be a major impact on operations and hence their revenue, there will continue to be a demand for weather forecasting to help warn them in advance of adverse weather.
There is a great article from Inc. that came out earlier this year about this very subject. Have a look when you have a chance, here.
As you may have noted from the article, many large corporations are hiring meteorologists (or private weather consulting companies/vendors). I think private weather forecasting will continue to be an area in meteorology where there will be substantial growth in the future. Large weather vendors should have a bright future ahead.
Where do I see limited growth? Unfortunately, I believe like there will be further consolidation in the TV markets, budget cutbacks at various government agencies (that employ meteorologists) due to our debt issue, and weaker growth in most operational weather sectors outside of energy meteorology. I believe energy meteorology will continue to see growth (both in the renewable sector) and on the energy trading floor. I’ll definitely discuss my reasons for this in future posts.
Bottom line, there is a bright future in meteorology but I think it’s geared towards weather risk, private forecasting, and the weather modeling side of the field. The more hurricanes, tornadoes, fires, floods, and other severe weather phenomenon that continue to impact our lives (and private company operations), it will continue be a wake up call for corporations and governments. 2011 should be a stark reminder that Mother Nature is a serious business and meteorologists can provide significant value to their bottom line.
Do you agree? Where do you see the future of meteorology? (Photo credit: celebritycartoons.net)