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The Value of Government Weather and Climate Data

The U.S. Commerce Department’s National Oceanic and Atmospheric Administration (NOAA) collects weather and climate data. As we noted in a recent Commerce Department report on the Value of Government Data, the return to society on investment in government meteorological data is large.

For example, one survey found that the overwhelming majority of people said they used weather forecasts and did so an average of 3.8 times per day. That equates to 301 billion forecasts consumed per year!

The study’s authors note that, other than current news events, there is probably no other type of information obtained on such a routine basis from such a variety of sources. Certainly, the researchers say, no other scientific information is accessed so frequently. And while the information is being delivered from an array of sources, most of it directly or indirectly originates from NOAA’s National Weather Service (NWS). Americans check to learn what is happening in the weather, and we plan our days – and lives – based on this data.

The researchers found a median valuation of weather forecasts per household of $286 per year, which suggests that the aggregate annual valuation of weather forecasts was about $31.5 billion. The sum of all federal spending on meteorological operations and research was $3.4 billion in the same year, and the private sector spent an additional $1.7 billion on weather forecasting, for a total of private and public spending of about $5.1 billion. In other words, the valuation people placed on the weather forecasts they consumed was 6.2 times as high as the total expenditure on producing forecasts. NOAA data is re-packaged and analyzed to produce 15 million weather products, such as air quality alerts, the three, five and ten day extended weather forecast, earthquake reports, and tornado and flash flood warnings. Many end users do not realize that NOAA provides the data they see and hear every day on The Weather Channel, AccuWeather, the radio and in the morning paper.

Private sector firms often build on data from NOAA and other government agencies to create new products. For example, the Climate Corporation sells weather insurance to farmers and is also a high-tech agricultural consultant. The company processes 50 terabytes of new and historical data each day. One of its principal data sources is the National Weather Service’s Nexrad (Next Generation Radar), a network of 159 Doppler radar stations that scans weather data in two million locations. Another source of data is 60 years of crop-yield statistics from the U.S. Department of Agriculture. Together, these data sources enable the company to generate moisture, precipitation, and soil condition maps down to the level of a farmer’s field. As a demonstration of the value Climate Corporation has created, Monsanto bought the company in November 2013 for nearly one billion dollars.

NOAA continues to innovate. The agency is approaching the half-way mark of a 10-year initiative to improve its hurricane forecasting, known as the Hurricane Forecast Improvement Project. The objective is to increase the response time government officials and citizens have to prepare for a storm, saving more lives and property. Specific goals are to reduce the average errors of hurricane track and intensity forecasts by 20 percent within five years and 50 percent in ten years, by implementing a forecast period out to seven days. NOAA’s initiatives to improve flood forecasts not only save lives, they promise significant economic benefits, with some studies suggesting that just one hour of lead-time can yield a ten percent reduction in flood damages. According to a report prepared by EASPE, Inc., economic benefits from addressing reservoir optimization, short-term floods, and long-term flood events carry potential annual savings of $1.62 billion (2000 dollars). If long-range hydrologic forecasts and water resources such as hydropower, irrigation, navigation and water supply are also optimized, additional annual savings of $766 million (2000 dollars) can be realized, according to the report, which states that this is a conservative estimate. In other words, these efforts taken together might yield annual savings of $2.39 billion (2000 dollars).

Clearly, the value of government weather and climate data is enormous: tens of billions of dollars in annual aggregate valuation, and dramatic savings (with the potential for far more) in life and property realized by improving hurricane and other forecasts. Moreover, as was seen in our earlier report on government data overall, the cost is far eclipsed by the value. There are innumerable ways in which weather data touches our lives, allowing us to plan, prepare and optimize: from the grand and important decisions such as when we launch satellites, to choosing when to plant crops, and even to the more mundane business of getting dressed each day, our lives turn in no small measure on what we know about the weather. Indeed, the better we become at forecasting, the less accurate the quote attributed to Mark Twain: “Everybody complains about the weather, but nobody does anything about it!”

Jane Callen, Economics & Statistics Administration


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