Wednesday, March 6, 2019

2018 Market Assessment on Climate Services in Africa

The availability, diversity, sophistication and use of weather information is increasing rapidly within the public and private sectors globally. Availability is also coupled with increased demand from economic sectors looking to adapt to the widespread impacts of climate change. To address this, international private weather companies have begun to market tailored weather information products intensively and have generated considerable demand from private as well as government customers across a wide range of economic sectors, including agriculture, mining, forestry, construction and energy. 

Thriving commercial weather markets across the world have invariably been underpinned by National Hydrological and Meteorological Services (NHMSs) that provide consistently accurate primary data – about weather phenomena on the synoptic (large scale) and local scales – generated from their extensive observation networks. Such data can significantly improve the quality of weather information products being provided or developed by private companies for public and commercial use because the products are often solely derived from satellite observation data. The improved quality of products as a result of inclusion of primary weather information – particularly those describing local scale weather phenomena – is likely to give a private weather company a significant competitive advantage over other providers of weather information that do not incorporate such local data.  

On the other hand, NHMS' benefit from establishing win-win partnerships with private weather providers to access much needed sources through profit sharing agreements, by leveraging technology and in developing weather markets for improved weather products. The availability of improved weather products across all economic sectors can, for example, reduce loss of life and damage to infrastructure during extreme weather events, diversify the economy by creating new business opportunities, and consequently increase tax revenues for governments. In addition, enhanced capacities to NHMS' also ensures that reliable and timely weather information is not only available to those who can afford it, but rather is also made accessible to vulnerable populations.  

With this in mind, the UNDP CIRDA Programme commissioned a continental-scale market assessment to investigate how thriving commercial weather markets could be catalysed in the 11 African countries supported by the UNDP CIRDA programme, and how their NHMSs could maximise benefit they derive from such markets. This market study was published originally in 2016 and was updated in 2018 to gauge the impact of both the CIRDA Programme and national projects aimed at enhancing the access to climate information and early warning systems. 

Two main conclusions from both studies have emerged: firstly, that the NHMSs should collaborate rather than compete with private weather companies; and secondly, that the NHMSs should embark on a phased transition to derive benefits from the national commercial weather markets. Collaboration with the private sector is advisable because the skills, core business objectives, and comparative advantages of private weather companies compared with those of NHMSs are very different. Such companies are innovating rapidly, using state-of-the-art technologies, and generating demand for their products through intensive marketing targeting specific user groups. By contrast, NHMSs focus on providing public goods such as basic weather forecasts to the general public, an accurate national climate record, and early warnings of hazardous weather events; they consequently do not yet have the business skills required for developing and marketing cutting edge products. By providing accurate data and working closely with the private sector to improve the quality of climate and weather information products available in their countries, NHMSs can potentially share, through royalties or fixed fees, the revenues generated from products that incorporate their primary data. Such business deals are – as has already been demonstrated in some countries – likely to generate far greater income streams for the NHMSs than from the simple sale of primary weather data. 

This market assessment also found that NHMSs in countries supported by the UNDP CIRDA programme were in varying states of readiness for engaging with the private sector. The 2018 market assessment update revealed that considerable progress has been made following the years receiving CIRDA programme support. A general upwards trend was observed for all countries with regard to their readiness to engage with the private sector. An important next step for NHMSs will be to undertake in-depth national market assessments to identify suitable entry points into their respective commercial weather markets. 

Results from this updated market study are extremely relevant not only for the UNDP CIRDA partner countries by providing potential entry points to engage with the private sector, but also for climate adaptation practitioners looking to address a key barrier in promoting climate adaptation in economic vulnerable countries. By increasing the long term  sustainability of NHMS and improving access to climate information services, future adaptation projects will have the capacity to develop the tools needed to climate proof development thereby, protecting lives and livelihoods. 

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