Teams of academic experts from a host of UK universities have joined Lancaster University Management School’s CRUCIAL initiative, designed to help forecast future climate-related risks.

The expert teams, all with climate risk specialisms from the universities of Exeter, Glasgow, Newcastle, Oxford, Reading, Bristol, and Imperial College, have now joined the Climate Risk and Uncertainty Collective Intelligence Aggregation Laboratory (CRUCIAL) — an initiative led by Lancaster University Management School with support from Exeter University.

Funded by the SCOR Foundation, CRUCIAL uses ‘prediction markets’ (market-like mechanisms to combine different sources of knowledge and expertise) to generate forecasts of future climate-related risks.

After running pilot markets to validate the new approach for producing consensus forecasts of climate-related risks, CRUCIAL now plans to establish prediction markets as a new type of scientific institution for synthesising and summarising diverse expertise and modelling approaches.

Dr Kim Kaivanto from Lancaster University Management School leads the CRUCIAL project. He explains: “With the 2025 hurricane season just around the corner, accurate forecasting of these devastating and destructive events is more important than ever – but climate change means traditional forecasts based on historic events are no longer reliable.

“CRUCIAL’s prediction market broadens the range of techniques and data sets used for predicting future events and is a performance-driven way of funding climate forecasting. By strengthening our team with climate experts from a diverse range of UK universities, CRUCIAL is now able to progress to the next stage after a series of successful pilot markets.”

When experts join the CRUCIAL market, they use their specific knowledge, modelling, and expertise to buy contracts on specific hurricane-count outcomes — up to the price that their modelling and judgment indicates is warranted. CRUCIAL’s AGORA platform’s automated market maker ensures that participants, using their different and diverse expertise and modelling, can always buy or sell contracts so that their expertise and judgment is incorporated into the market’s prices.

The prevailing prices at which these contracts trade can be interpreted as the probabilities of the number of hurricanes that will take place.

These prices evolve as more information becomes available, providing decision makers with an up-to-date forecast that incorporates the expertise and knowledge of all the participants.

Participants in the CRUCIAL market do not have pay to take part, as in some other prediction markets, but are eligible to receive cash rewards based on the accuracy of their contributions.

To find out more about CRUCIAL and how prediction markets work, visit: www.crucialab.net