In 2021 it would seem, we’ve reached an inflection point with regard to capitalism and climate change. In 2020, Bloomberg estimated some $500 Billion was being spent on technologies to fight climate change. Now, Artificial Intelligence (AI) is joining in. Now, governments and central banks are beginning to finance more technologies on the climate change front than ever before. This is good.
First, a quick primer on AI. The term Artificial Intelligence is an umbrella term as AI is a combination of different technologies. They can be mixed and matched to work together or as stand-alone for various uses. For example, in search engines, two key AI tools are used; Natural Language Processing and Machine Learning. Then there’s neural networks and expert systems. There are other subsets and tools, so AI is a complicated mix of tools. When you think of AI in Hollywood terms such as the Terminator, that’s called General AI. That type of AI does not exist today and may never, since it relies on an understanding of consciousness and we still don’t understand what that means. So today, AI is used in single-purpose jobs and is known as Narrow AI.
Companies are now seeing that the effects of climate change are wreaking havoc on economies and their business models. From supply chain issues to flooding damaging buildings and materials and wildfires forcing evacuations.
Tech startup OneConcern is a company that’s using AI as a climate intelligence tool. They’re developing a “digital twin” of the planet’s built and natural environment to help companies better manage risk. Another is Jupiter Intelligence, whose clients include NASA and Liberty Mutual. This is a growing category of companies known as climate risk analytics. They use Machine Learning and Neural Networks to help clients manage risk.
AI is also playing a role in the ancient business of insurance. It is increasingly harder for insurance companies to predict climate related risks and AI can help them do that. The innovative idea here is parametric insurance, whoch provides automaed pay-outs on claims based on climate events such as fires and flooding. This uses Predictive Analytics to help anticipate events and offers greater transparency in a data-driven model. Paris based Descartes Underwriting is leading the market in this segment.
Another interesting company in the insurance sector is Kettle. The use a highly specialized neural network to learn about wildfores in local areas based on climate modeling. Then they provide reinsurance based on an analysis of risks. This helps local cities and towns to take measures to help prevent forest fires in their area.
Another area AI is being applied is in carbon offsets, which is perhaps the most complex and confusing area of fighting climate change. Companies can either reduce emissions themselves or offset them through buying carbon credits from other planet-friendly companies. One company, Pachama, uses aerial surveillance to monitor forests and measures the carbon capture of the forest over time to manage the buying and selling of carbon credits. The carbon offset market idea is complex and highly controversial and it is yet unsure if it will be sustainable.
Some AI companies are using satellites to monitor soil and ground conditions along with weather data to help farmers grow better crops. Others are using AI tools to identify potential natural carbon sinks where carbon could eventually be added. While some are using AI to help design carbon capture systems that can be placed on rooftops and on properties in cities and high industrial agriculture areas.
Climate change can be fought and solved with only one technology such as AI. It will take a mix of technologies along with us humans behaving a little differently than today. Reducing or eliminating plastics (we can use fungi instead) and moving away from fossil fuels.
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