Want to make some easy money? Bet on global warming at Intrade. Yeah, the leading online “prediction market” offers members the opportunity to bet on global temperature change, melting sea ice, and other climate-related phenomena.
Intrade describes itself as “a marketplace for the exchange of predictions on uncertain future events often called ‘prediction markets’ or ‘event markets’.” It’s perhaps most famous as a crowd-sourced prediction generator with a reputation for accuracy—the website dominated the news cycle after it correctly predicted Bush’s victory over Kerry, even in Florida, when the polls and pundits leaned towards Kerry. Since then, its market predictions are often treated as a reliable portent for future events.
Right now, 61.8% of bettors have wagered that Obama will stay president, 33% bet that the U.S. will again plunge into recession in 2013, and 99.5% have placed bets that this September will see the Arctic sea ice cover retreat to a new record low. Yes, the e-traders are in near-unanimous agreement that climate change will cause record ice shrinkage this month.
That’s probably because NASA satellite data has already revealed that last month, the Arctic ice extent had already shrunk to a new record low—and the melt season doesn’t typically end until mid-September. And indeed, the National Snow and Ice Data Center has released data showing that a new record has certainly been broken this month; the following animation details the trend:
So, place your bets that the Arctic ice cover will melt away to comprise less than 4.3 million square kilometres on average for the month of September—it’s pretty much already happened. You won’t see a windfall, but hey, a sure thing is hard to come by.
To bet on climate change events on Intrade, you either buy or sell “shares” in an outcome of a particular event. If you think September will see record-breaking lows for Arctic sea ice—as nearly every climate scientist and functioning earth observation satellite indicates it will—you “buy shares” in the event (in this particular event, each share is worth $9.95). If you don’t think new lows in ice coverage will happen, you “sell shares” — and most likely lose your money. It works just like the stock market—you only buy or sell shares to or from other members.
You can also bet on just how large a given month’s temperature anomaly is going to be — as in, whether or not September will be 0.45˚C warmer than the global average temp. That particular “prediction event” has a 90% certainty rating. See? Betting that global warming is occurring means easy money—just head over to NASA’s Goddard Institute for Space Studies, get the latest from the model’s predictions, and plug ’em into Intrade. Make big enough bets, and you could earn literally dozens of dollars a month.
“We have been listed seasonal hurricane markets for at least five years now, the ice extent markets since last year and the temperature anomaly markets since 2010,” Carl Wolfenden, Intrade’s Exchange Operations Manager tells me in an email. I asked him why Intrade had opened climate-related markets in the first place, and he told me that “all of our climate markets were suggested to use by customers interested in trading the outcomes.”
“Unfortunately these markets have never seen a huge amount of trading,” he said, “just a small group of dedicated traders.”
If it seems rather callous to be betting on the steady advance of an impending climatic disaster, well, sure. It kind of is.
— Bill McKibben (@billmckibben) September 11, 2012
But most of the participants aren’t in it to cash in on tragedy; they’re there to prove a point, one way or the other. To put their money where their climate models are. And they’re aren’t a ton of them, but they are intensely focused on the issue—the discussion boards that accompany each prediction market routinely rack up 100s of comments. Here, two traders argue over whether they should bet on Arctic sea ice declining not just below 4.3 million km, but all the way to 3.7 million km:
Once again, it must be noted that Supak and mrrightnow are discussing the act of Arctic ice cover reaching historic—and perilous—lows. And it’s a little jarring indeed how they’re discussing the two outcomes as if they were horses in the Belmont Stakes.
But that’s not the point. The point, of course, is that despite all the blabbering that fills the internet, the airwaves, and our dinner tables about climate change being “unproven,” or some kind of hoax, scientists’ predictions are routinely coming true. Every month. And the smart money knows it.