24 February 2020

What can “climate services” as a new market contribute to climate action?

By Cervest

What can “climate services” as a new market contribute to climate action?

Despite increasing awareness of its detrimental effects, climate change is still not integrated into many business processes.

"Making decisions in the face of increasing climate volatility requires in the first place a thorough understanding of climate change and its impacts. This is difficult due to the complexity of climate science and the way multiple climate-related factors intersect, leading to composite risks which are even harder to predict. Nevertheless, more knowledge on the specific impacts exists than is currently utilised, with increased computational power now allowing us to make sense of vast amounts of climate-related data. Due to the difficulty assimilating all this knowledge into something that is decision useful there is a knowledge-action gap. The emerging market of “climate services” should therefore be welcomed as it aims to utilise data to make it easier to understand and respond to climate-related impacts.

What does the climate services market look like?

"Efforts have increased over the past decade to grow such a market which bridges the gap between abstract climate science and data and the concrete needs of people making climate-related decisions. It aims to transform climate-related data into ‘tools, products and information (climate services) that will enable climate-smart, strategic decisions’ according to the EU. Rather than another type of consultancy, climate services are supposed to provide products that are immediately decision-useful: practical tools, specific advisory services, or simply information customised in such a way that end-users can understand and act on it.",

"There are no exact figures on the size of this market, mainly because terminology is vague and not widely adopted, which raises the question to what extent it is in fact a “new” market opportunity.One study estimated the EU market to be worth €7.3 billion in 2016 and the global market €24.2 billion, with built environment and energy as the leading sectors, while another study adds water and agriculture. Although it is currently dominated by the public sector which builds on existing meteorological and hydrology services, the private share has grown significantly in recent years. Public infrastructure provides most of the raw data and the baseline for all services, but the translation into specific tools for a variety of end-users is wanting. The private sector comes in here, making information more decision-useful and tailored to the specific needs of companies, organisations or government projects.SMEs are particularly well-suited for this thanks to their flexibility and capacity for innovation, as well as their ability to respond faster to growing demands for more services as climate impacts increase."

How can AI help climate action?

One particular innovation enhancing climate services is through artificial intelligence (AI). There is a vast amount of climate-related data, which is multifaceted and ever-growing. Meanwhile, individual climatic factors cannot be observed in isolation, since climate risks are interconnected and it is, in essence, a systems issue. This double challenge is easier to tackle for AI than humans, as AI can make more sense of such ‘complex and nonlinear data’. AI-enabled climate services could also more easily keep incorporating new data and provide real time predictions. Existing services providing climate-related information might question how climate services qualify as a new category, but AI arguably adds an indisputable distinction. By combining multiple climatic factors it significantly increases the distinctive value of climate services as opposed to standard weather apps, especially when it enables seasonal forecasting.

Why haven't I heard of climate services before?

"The EU MARCO project and EU-MACS project were set up to understand and support the climate services market and found that there was latent demand. They identified lack of awareness of the specific, local impacts of climate change as a key barrier to market growth, which simultaneously reduces the sense of urgency regarding climate risks. There is then a vicious cycle of climate services increasing understanding of climate impacts, but lack of understanding deterring their uptake. Communication is therefore key, since complex science needs to be conveyed in a way that is meaningful to decision makers in business, government or civil society so they understand the range of climate risks.",

"Another barrier they identified was lack of regulation pushing for climate action, which is considered a key driver for businesses. However, regulation could also result in slowing down innovation if the focus would turn on helping companies just meet their regulatory requirements. Therefore a balance needs to be struck between the type of regulation and enforcement mechanisms incentivising climate action on the one hand and creating a climate services market that does not fixate on compliance on the other. This would hopefully contribute to corporate action on climate change and reduce opposition to such regulation."

What about societal resilience to climate risks?

Although advancing climate action has societal benefits, there are concerns about the exclusive nature of private climate services when information is privatised. Climate services should be aware of increasing inequality by allowing only those who pay for services to prepare for climate risks. A clear distinction is therefore needed between exclusive information encouraging corporate climate action and information on disruptive climate risks affecting wider society. The latter should be shared openly, meaning that alongside public climate services focused on societal resilience private providers should be incentivized to share disruptive risks more widely. Already the market is structured in such a way that private providers mainly serve corporations and industries while public providers serve the general public and researchers.


The emergence of a climate services market should be welcomed because although it builds on existing markets, its key differentiator lies in enabling immediate climate action based on science. Cervest’s Earth Science AI for instance will allow users to determine their climate risk exposure on their individual assets by aggregating and modeling multiple climate-related factors. Conveying the specific impacts of climate change is essential to addressing risks and the broader challenges posed by climate change. Meanwhile, by making its platform open-access Cervest supports the democratization of data which in turn helps build societal resilience.

About: Agnes is part of Cervest’s policy team. She researches the relevant regulatory context of the problems we are trying to solve through Earth Science AI and provides a social science perspective to complement the work done by the science, engineering and product teams.

If you’re interested in what Cervest is working on, then please head over to our careers page!

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