By: Emily Harris
Palisades, New York– It always sounds like it’s raining inside the Monell building at Columbia University’s International Research Institute (IRI) for Climate and Society. The roof is made of rows of aluminum slats aligned side-by-side, also known as a standing seam metal roof. These slats open and close based on the movement of the sun and the clouds as they pass overhead, reacting to the cooling and heating patterns outside, creating a pitter-patter sound that sounds like rain on a window pane. It is just one of the IRI’s designs for monitoring weather changes.
Dan Osgood, an IRI researcher and agricultural economist leads the financial instrument sector team. They use data to provide climate assessments to farmers, small businesses, and banks. These assessments calculate the risks for new financial investments, measuring the benefits against impending climate changes. That, Osgood explains, could be anything from a major financial loan to buy acres of land, to a modest loan for a single ox or an order of seeds. “We work with some of the biggest corporations in the world and some of the lowest income farmers in the world…they have very similar concerns, just different numbers of zeros,” he says.
For many farmers, climate change means unpredictability that can cause financial ruin, as larger and longer term investments become trickier to select. A single heat wave can put a farm in the red. Big data helps farmers so they can make more informed decisions about when to take out loans, invest, and take risks. The goal is for business owners to make decisions with the technical tools and information that help accurately predict how their land will be affected in coming months, or years. “Each [business owner] has their own perspective that we need to be combining – the bank or the insurance company or the government program – to quantitatively design,” Osgood explains. “Each of these different groups, they have their own version of the story. They face a risk. They have an opportunity in that they need to adapt in order to meet the needs of the future.”
For banks and insurance companies, the concern is large-scale, longer-term climate change that affects the reliability of their clients. For example, a farmer may take out a small loan to buy an ox to plow their fields. If the cow dies unexpectedly, it is an investment the bank can afford to lose should the farmer not be able to pay it back. But if there is a regional drought and the problem affects farmers on the larger scale, the loss on investment can be devastating. That’s how Osgood’s team helps farmers to get a total picture of how the agricultural landscape is faring. A farmer’s feedback on drying crops coupled with Osgood’s satellite data on decreased rainfall gives banks and farmers a bigger picture on when and when not to invest.
The way that climate change creates new weather patterns over time – over the course of several harvests -poses a new problem: how does agricultural business strategy overhaul it’s old methods and draw anew? For example, one of the biggest threats to agriculture is not total rise in temperature or total rainfall, but the erratic patterns at which these shifts occur. “It’s the timing specifically of when the rainfall happens when the season happens,” Osgood explains. “In agriculture, the crops really are finely tuned to have rain at very specific times. [When] it’s happening at different timing – more rainfall in a given day with more dry days in between – these kinds of things can really have severe impacts.”
Osgood has seen many poor investments made due to predictions based on models that were faulty or out-of-date. “Many firms on Wall Street would say ‘we’ve got the best analysis,’ but these mathematical formulas are not perfect in that they often miss a lot of things,” Osgood says. Without the most sensitive climate assessment tools, missing slight changes in climate change patterns can mean the success or failure of a farm. Osgood’s team works to bridge that knowledge gap.
On-the-ground observation, accurate scientific assessment and real financial analysis can all work together to help the agricultural industry adapt in the face of inevitable climate change: “My hope is that a future generation will be able to know the details and participate as a combined voice in making decisions instead of having these things decided in small meetings and by uninformed computer models.”
More from Dan Osgood on who these climate assessment tools are designed to help: