Retired Rear Admiral David Titley used to be a climate skeptic. But after decades in the service, he came to see the carbon crisis as “one of the preeminent challenges of our century.” As the Navy’s chief oceanographer, he spearheaded a task force to investigate the national security implications of climate change.
Titley has since turned his attention to the world of business. He now teaches Weather Risk and Financial Markets at Pennsylvania State University, the capstone course for meteorology majors specializing in risk management.
Titley explained in an interview that climate change will soon become a regular intrusion into the economy, dispensing heat waves, drought, and coastal floods — and not just front-page disasters, but nuisance-level disruptions to business and commerce. Companies will need to plan for climate risks, tweaking output and retooling supply chains based on the latest projections.
“How do you do business and weather? Risk and weather? Climate and risk?” asked Titley. “I could go to a business school and say, ‘Hey, you guys are really going to have to start understanding not only the statistics of weather, but the changing statistics of climate to be effective.’” Rising temperatures are set to put a dent in corporate profits, creating a need for business-savvy weather experts to advise executives.
Weather impacts commerce in innumerable ways. Choppy ocean waters slow shipping. Heat waves strain power utilities. Students in Titley’s class simulate trading in soybean and natural gas futures, buying and selling in response to shifting weather patterns.
“I was fortunate enough to take this course as a Weather Risk student at Penn State and started at Mars shortly after, so I’ve seen the benefits of this course first hand,” said Katie Johnson, a senior researcher at Mars Incorporated who mentors students in Titley’s class. Foul weather is bitter news for the candy business, Johnson said.
“One drought in Georgia could cause a significant reduction in the amount of peanuts available and a significant increase in the price we pay for them. This puts our Snickers and Peanut M&M’s brands at risk,” she explained. It’s the job of meteorologists to communicate these risks to managers.
“We give [our students] a lot of communications training because it’s almost certain that their boss is not going to be a meteorologist — they’re going to be a business person of some sort,” said Titley. “How do you take all that complex, technical weather stuff and make it into something that the boss can understand but still convey the risks and the probabilities and the subtleties?”
“There’s a big difference between some guy showing up on television saying, ‘If we don’t do anything the world will be 3 degrees C warmer than it is now,’” Titley said, “versus, ‘Your supply chain, because it uses the Port of New Orleans, becomes in serious jeopardy in 20 or 30 years, maybe sooner, because the Antarctic ice sheets in fact are melting.’”
Global warming, to paraphrase the Pentagon, is a risk multiplier. It loads the dice for severe storms and punishing heat, driving up the human and economic costs of failing to prepare for extreme weather.
On our current warming trajectory, rising seas could flood upwards of $100 billion of coastal property by mid-century, according to the Risky Business Project. The Midwest and Southeast could see as much as a 70 percent reduction in crop yields as the result of intense heat. The financial hazards are so great that Michael Bloomberg, one of the co-chairs of Risky Business, is leading an industry task force to educate investors, insurers and lenders about the risks of climate change.
Well-trained meteorologists can help businesses thrive even as extreme weather amplifies economic risks. On this front, students graduating from Penn State hold a competitive edge. Researchers versed in risk need little additional coaching to prove valuable to industry. Johnson says her team at Mars sees Titley’s course as a “talent pipeline.”
That’s huge, because academia has a long history of lagging behind the needs of industry. The nation’s first degree program in computer science didn’t appear until 1962 at Purdue University, roughly three decades after IBM unveiled the first punch card computer. Titley is trying to stay ahead of the curve, giving students the skills they need to succeed in a shifting market and a changing climate.
“College is not cheap. I don’t care what university you go to,” said Titley. “So how do we make sure that what we provide the students … is as good as we can make it?”
There was a time when business was conducted with paper and pens and rotary telephones. Then the personal computer was invented, and everyone needed an IT guy to explain Microsoft Office. There was also a time when weather was placid and easy to predict. Then climate change happened, and everyone needed a weather guy to explain risk.