Clear consequences

The Star

2 days ago

THE Butterfly Effect is the chaos-theory idea that the flapping of an insect's tiny wings can influence massive weather events far removed from it in distance and time. It may overstate the importance of butterflies, but it is a reminder of how small actions can have larger, unforeseen consequences.
An even clearer example is the Trump administration's recent decision to stop sharing military satellite data with weather forecasters just ahead of what will be a busy hurricane season. The effects will reverberate far beyond weather forecasting, threatening lives and livelihoods and even accelerating the nation's growing home-insurance crisis.
In late June, the US National Oceanic and Atmospheric Administration (NOAA), which houses the National Weather Service, said it would stop receiving weather data from the Defense Meteorological Satellite Program, including readings that have long helped forecasters peer inside hurricanes to predict whether they will intensify rapidly. This information is especially useful at night, when some other observational tools aren't available and communities in a storm's path are at their most vulnerable to an unexpected strengthening.
After an outcry, the US Defense Department delayed the cutoff date to the end of July. But that still means forecasters will be missing key information in the busiest part of a hurricane season that was already expected to be busier than usual. Asked for an explanation, the Defense Department basically mumbled, 'Something something cybersecurity.'
It's worth noting that NOAA is part of the Commerce Department, which is run by Howard Lutnick, who is the former chief executive officer of the investment firm Cantor Fitzgerald LP.
In that role, Lutnick helped raise funding for and sat on the board of Satellogic Inc., a company that 'bills itself as an emerging federal contractor that can offer crisp images of natural disasters and weather events in real time,' the Associated Press reported earlier last month. Cantor had a 13% stake in Satellogic as of March, the AP noted, when Lutnick was still selling his investments to comply with government ethics standards.
Maybe the plan is for a future in which cash-strapped local officials and forecasters have to pay Satellogic (or Elon Musk's Starlink, or some other private satellite provider) for life-saving hurricane data in lieu of free, time-tested government products. In the meantime, NOAA insists it still has plenty of tools to track hurricanes.
Professional hurricane trackers disagree. In early June, weeks before the satellite news, longtime South Florida meteorologist John Morales went viral for warning viewers that NWS staffing cuts had already undermined his ability to predict the strength and path of hurricanes.
Government weather offices in central and south Florida were 20% to 40% understaffed, and launches of weather balloons carrying instruments to study hurricanes at high altitudes were down 17%, he said.
'The quality of these forecasts is becoming degraded,' Morales said. 'We may be flying blind, and we may not exactly know how strong a hurricane is before it reaches the coastline.'
This is an obvious threat to the lives and properties of people in the paths of hurricanes, especially in an era when a hotter climate is making rapid storm intensification more common. Average maximum intensification rates were up to 29% higher in 2001-20 than in 1971-90, according to a 2023 study in Nature Scientific Reports.
Last October, Hurricane Milton exploded from a tropical storm to a Category 5 monster in less than two days (causing Morales to break down on-air), fueled by record-warm water in the Gulf of Mexico. It's never been more critical for weather forecasters to give people as much time as possible to evacuate and board up their homes and stores.
Somewhat less obvious is the impact a hurricane-information gap could have on home insurance. If those houses and stores aren't boarded up in time, then they suffer more damage. If disaster-relief services (which these days may or may not include the Federal Emergency Management Agency) aren't in the right place when a storm hits, then damage could increase as properties sit in water and are open to the elements.
Meanwhile, insurers and reinsurers are increasingly selling catastrophe bonds to help pass their rising disaster costs on to investors. Issuance is up to US$18.1bil (RM77bil) so far this year, the Financial Times reported recently, already topping the full-year record of US$17.7bil set in 2024.
Some of those bonds have parametric triggers, meaning they pay insurers when certain weather measurements are recorded. In the case of hurricanes, those could be wind speed and barometric pressure. Spotty weather data could mean those triggers never get triggered, leaving insurers unpaid.
'This could ripple across the entire property-insurance ecosystem,' Anthony Lopez, CEO of the Miami-based Your Insurance Attorney, told me.
'Less-reliable forecasting means more surprise losses, which will impact how insurers model risk, which will lead to premium hikes, tighter underwriting and more insurance exits in high-risk states like Florida.'
The gap between United States' home values and their insurance coverage against climate-fuelled disasters may already be US$2.7 trillion, by one estimate, invoking memories of the subprime mortgage crisis. Every fresh blow that makes insurance more expensive and harder to get widens that gap a little more and makes the eventual day of reckoning even more painful.
Like that theoretical butterfly, the Trump administration's decision to deprive weather forecasters of a little satellite data – whether motivated by Project 2025-brand ideolog – will have far-reaching consequences. But we can't say they were unforeseen. — Bloomberg Opinion/TNS
Mark Gongloff is a Bloomberg Opinion editor and columnist covering climate change.