Analysis-US government pullback from climate science fuels boom for private data firms

By Katy Daigle and Simon Jessop

BELEM, Brazil (Reuters) -A British real estate manager overseeing 26 billion euros ($29.93 billion) in assets and concerned about flood, fire and other climate-related risks to its properties sought help from Climate X, a data analytics firm based in London.

Climate X started crunching numbers and using its AI risk modeling tool, informed ​partly by U.S. scientific data, to help Savills Investment Management estimate possible damages to 300 of its assets in Europe and Asia if weather disruptions hit.

Savills said the information helps with investment decisions and ‌it may now use Climate X analytics to assess hundreds more properties.

U.S. President Donald Trump's administration has been slashing spending for science services at a time of surging demand for analytics due to escalating climate change and extreme weather. That is helping to drive a data industry boom ‌for private data companies like Climate X that are providing everything from drought or pollution risk assessments to locations for untapped mineral reserves.

Revenues for the earth intelligence sector should rise at least 10% to $4.2 billion by 2030, market analysis firm Gartner said, teasing the industry in July as a "new revenue growth opportunity."

The industry's impact could be even more significant. The World Economic Forum has estimated earth intelligence will help reduce risk, grow opportunities, and generate jobs for a total $3.8 trillion in economic value by 2030, up from $266 billion today.

The private data boom is also raising questions around accuracy and access for those unable to pay. Private companies can do only so much without baseline data from U.S.⁠ government agencies such as NOAA, according to officials from more than a dozen ‌firms who spoke with Reuters.

"Without it we wouldn't know if our models are good or bad, frankly," Climate X co-founder and Chief Operating Officer Kamil Kluza said.

With U.S. datasets for climate-related information like methane plumes or flood maps possibly vanishing from the public sphere, Kluza's company plans to lean on alternatives from the ‍EU, Japan and UK Met Office.

"We are huge consumers of governmental data to validate what's happened in the past," Kluza told Reuters. "The governments hold the past flood history ... past subsidence incidents, landslides, and so on."

HUNTING OPPORTUNITY AND COSTS

Gartner predicts private companies will soon account for more than half of global spending on data services, up from just 15% currently.