Betting on Disaster: The Rise of Climate Prediction Markets
- Climate prediction markets like Kalshi and Polymarket are expanding beyond sports and cryptocurrency into weather and climate forecasting, drawing sharp divisions among scientists over the gamification of environmental...
- While betting on weather patterns is not entirely new, the entry of major prediction platforms into long-term climate crisis outcomes has left researchers uneasy.
- I find it depressing because it’s distracting us from what we should be focusing on.
Climate prediction markets like Kalshi and Polymarket are expanding beyond sports and cryptocurrency into weather and climate forecasting, drawing sharp divisions among scientists over the gamification of environmental disasters. Kalshi reported a 500% increase in weather and climate wagers over the past year, pushing its market volume to $1.1 billion. The platform has partnered with the Weather Company, owner of the Weather Channel, to increase its credibility in environmental betting.
Climate Scientists Raise Concerns Over Disaster Betting
While betting on weather patterns is not entirely new, the entry of major prediction platforms into long-term climate crisis outcomes has left researchers uneasy. Climate scientists argue that financial wagers on events driven by fossil-fuel-induced climate breakdown trivialize raw human suffering and distance the public from taking meaningful action. Particular scrutiny has focused on the financial markets surrounding extreme weather events like wildfires. Large bets were placed on the Los Angeles fires in 2025 before both Kalshi and Polymarket instituted bans on such wagers due to concerns over unintended incentives for arsonists.
I find it depressing because it’s distracting us from what we should be focusing on.
Kaitlyn Trudeau, Climate Central Kaitlyn Trudeau, a scientist at the non-profit Climate Central whose grandfather lost his home in the Los Angeles fires, expressed dismay at the trading activity. While acknowledging that prediction markets have broader uses, Trudeau noted that they do not reduce or solve climate risks.
Market Forecasting Versus Environmental Realities
Prediction markets operate largely as gauges of public opinion and collective forecasting. A spokesperson for Kalshi stated that the company views its operations as part of well-calibrated forecasting data, using market wisdom to anticipate environmental outcomes such as temperature highs and flood severity. Simultaneously, researchers are increasingly utilizing artificial intelligence and expanded data sets to model complex climate trajectories. However, actual planetary outcomes continue to present significant forecasting challenges. The United Nations recently acknowledged that the foundational international target to limit global temperature rises to 1.5C above pre-industrial levels is effectively unattainable due to rapid and unrestrained global heating. Conversely, the rapid growth of clean energy has made the most extreme previous emission scenario, known as RCP8.5 and driven by heavy coal burning, highly unlikely. At the same time, natural feedback loops—such as thawing permafrost, intense wildfires, and overheating wetlands—could accelerate overall global heating by up to 30%, adding an estimated 0.4C to global temperatures according to a recent study.
