Skip to main content

European Market for Climate Services

Periodic Reporting for period 2 - EU-MACS (European Market for Climate Services)

Reporting period: 2017-11-01 to 2018-12-31

PURPOSE AND CONTEXT
To support further product development and effective widespread uptake of climate services, as a means to boost mitigation of and adaptation to climate change as well as capabilities to cope with climate variability, the European Commission has included several actions in its current research programme Horizon 2020 (H2020). Essentially these actions follow from the logic to implement the European Research and Innovation Roadmap for Climate Services. Climate services are defined as all informational services based on transformation of climate related data (observations and/or projections) – often together with other relevant information - into customized information products, offered as such or embedded in consultancy and/or education, with the eventual purpose of improving operational and strategic decision making and planning in public and private organisations as well as for private persons. Use of climate services should help to mitigate risks of climate change and climate variability and improve possibilities to benefit from opportunities created by climate change and climate variability.

SOCIETAL RELEVANCE
Public and private organisations will need climate services in order to more effectively deal with operational and strategic changes implied by climate change mitigation (greenhouse gas emission reduction) and climate change adaptation policies. The less such services are available and/or the poorer such services are tuned to the needs of prospective users, the less effective mitigation and adaptation efforts will be.

OBJECTIVES
To date in most economic sectors the uptake of climate services is still hesitant. The project EU-MACS (European Market for Climate Services) will analyze market structures and drivers, obstacles and opportunities from scientific, technical, legal, ethical, governance and socioeconomic vantage points. The analysis is grounded in economic and social science embedded innovation theories on how service markets with public and private features can develop, and how innovations may succeed. The project aims to provide insights and support to a better matching of supply of and demand for climate services, by means of protocols and tools meant for climate service providers and users, as well as by means of policy recommendations, policy briefs, and research reports addressed at policy makers, climate service developers, climate service providers, and climate service users and user groups. Even though a good part of the output will have a broader bearing, the focus sectors of EU-MACS are finance, tourism, and urban planning. EU-MACS cooperates closely with the twin project for climate service markets, named MARCO.
The project EU-MACS consists of seven Work Packages (WP), of which WP6 and WP7 concern Communication & Dissemination (WP6) and Project Management (WP7) respectively.
WP1: A review of current market conditions and innovation prospects in the markets for climate services
WP2: Exploring the climate services value chain cluster options in finance/ asset management
WP3: Exploring the climate services value chain cluster options in tourism
WP4: Exploring climate services supply chain cluster options in urban planning
WP5: Synthesis-implications-recommendations – the most promising policies, measures, instruments, innovations and business models to promote climate service market development

Key conclusions and recommendations from the project are:
1) Establish (self-) regulation on mandatory climate risk reporting, transparency, & accountability – at least for several sectors, such as financial sector, urban planning, critical infrastructure, and food supply;
2) Enable, incite and support collaboration between different types of actors, notably also across the public – private divide, to engender learning and better needs based design and operation of climate services;
3) When engaging in climate service development, especially public actors and public-private collaborations should adequately and timely assess realistic and viable resourcing/business models for the stage of regular climate service provision;
4) Standardization, such as of terms, product categories, and product ratings, and quality assurance which is also relevant to current and prospective users, should be pursued by the entire climate services sector, i.e. not only covering upstream but also downstream climate services;
5) Monitoring and ex-post evaluation of climate services use and its effects, of which the results are public, with the aim to inform policy makers as well as providers and users, while inter alia also enabling to demonstrate the benefit generation capacity of different types of climate services for different types of users;
6) Basic climate research aside, innovation in climate services should encompass user relevant aspects of service delivery, such as related to visualization, risk indicators integrated with the user’s decision variables, collaborative mutual climate service development and delivery models, etc.
The assessment is carried out at two levels.
The two tier approach employing static and dynamic level analysis enables identification and coordination of
1. short(er) term policies and measures to reduce market failures based on static level analysis, and
2. long term policies and measures to better incite and orient innovations, based on dynamic analysis

The ambition of the study goes beyond the provision of a solid academic analysis. It also aims to illustrate how market matching and the initiation and uptake of innovations can be more effectively facilitated.
To this end search & matching protocols are explored and evaluated. The most effective ones will be made available for CS users, CS suppliers, and CS mediators, inter alia through dissemination from the project website.

The market exploration exercises in WP2, WP3, and WP4 not only can produce effective solutions, but are also by themselves meant to be replicated.
The creation and operation of collaborative market development frameworks at sectoral and/or regional level will be described in guidelines which will be available from the project website.

The product-market segmentation matrix appeared to be very useful in interactive formats with stakeholders as a means of stepwise identification of needed climate services.

The market uptake model and the exercise to tentatively assess the effectiveness of policies, while sensitizing these for inter-country differences in policy regimes provides a first semi-quantitative testbench for what could be expect from particular policy efforts or actor measures.
This also indicates the pathway to more research which would be greatly facilitated by a market observatory.

Another - preliminary - insight is the ambiguous role of open and free information. For upstream (basic) climate services and for important midstream assessment tools openness and affordability of use by practically all actors is important.
Yet, the more downstream one gets full openness and/or no/low charges can result in behaviour that slows down the development and uptake of climate services or may frustrate more nuanced (but in aggregate more useful) benefit sharing.
Obstacles for uptake of climate services by domain of structural causes
Climate Services Value Chain
Climate Services Basic Market Segements