When the Data Disappears
NOAA, Climate Models, and the Cascading Risks to Markets
Listen to the AI Narrated commentary overview of the post:
In an era where climate data underpins everything from infrastructure planning to mortgage approvals, the potential loss or degradation of NOAA’s datasets isn’t just an academic concern, it’s the foundations to triggering systemic risk.
I’m attempting to avoid any political views and just paint the facts and foresight around how climate models, insurance markets, and more broadly mortgage and property markets are interconnected. If critical climate and weather data become unavailable, unreliable, or restricted, we must understand what that means for our ability to model risk, insure against it, and ultimately, make sound economic decisions.
The Role of NOAA’s Data in Climate Modeling
Recent data from NOAA illustrates the increasing frequency and financial toll of billion-dollar disasters in the U.S. The table below highlights the growing number of these events per decade, with the last five years alone accounting for over 25% of total costs from 1980 to 2024. As NOAA’s data enables us to track these accelerating climate impacts, its absence would make it significantly harder to quantify and mitigate future risks.
NOAA provides foundational data for weather and climate models. These models are not crystal balls; they are probabilistic tools that allow industries and governments to anticipate future scenarios. They help predict extreme weather events, sea level rise, and shifts in temperature patterns—all critical for long-term decision-making. If NOAA’s datasets were to become inaccessible or inconsistent, the precision of these models would degrade, leaving us flying blind in an era where climate-related risks are escalating.
For instance, JLL highlights how climate risks are already reshaping real estate and insurance markets: "As climate risks increase, insurance costs are climbing, and in some cases, policies are being dropped altogether.". Without NOAA’s data, the ability to predict and mitigate these risks would erode further, leaving industries scrambling to adjust.
The Insurance Market’s Dependence on Climate Data
The insurance industry is fundamentally a risk management and risk transfer business. NOAA’s data enables insurers to assess vulnerabilities and set premiums accordingly. Without accurate data, insurers would either misprice risk—leading to financial instability—or withdraw from high-risk markets altogether. We’ve already seen this trend play out in states like Florida and California, where insurers have pulled back due to mounting climate risks.
According to JLL, "the increased frequency and severity of natural disasters are making it more difficult for insurers to accurately predict future risks, which in turn is leading to higher premiums and, in some cases, complete withdrawal from certain markets." If NOAA data were compromised, insurers would have even less visibility into future climate threats, exacerbating this retreat from high-risk areas.
Additionally, as climate risks intensify, insurance policies are evolving. New coverage structures are shifting more of the financial burden onto property owners through higher deductibles and less predictable costs. A 2024 report from the Urban Land Institute (ULI) and Heitman highlights that property owners should expect greater variability in expenses as insurers adjust to escalating risks.
The Mortgage Market’s Exposure to Climate Uncertainty
Mortgages are, at their core, long-term bets on property value stability. Lenders require insurance to issue mortgages. If insurance disappears or becomes prohibitively expensive, lenders will tighten access to capital or avoid certain regions altogether. Studies indicate that even a modest increase in insurance costs can significantly impact mortgage delinquency rates.
A report from Floodlight notes, "A $500 increase in annual insurance premiums can increase the likelihood of mortgage delinquency by 20%." As insurance rates rise due to increasing climate risks—and as insurers withdraw due to lack of reliable data—the mortgage industry faces growing instability.
The Property Market Fallout
With risk models compromised, insurers retreating, and mortgages becoming harder to secure, the real estate market faces a fundamental shift. High-risk regions—coastal properties, wildfire-prone areas, flood zones—could see steep declines in value. The ripple effects extend beyond homeowners; municipalities reliant on property taxes could face budget shortfalls, impacting public services and infrastructure investments.
JLL’s research warns that climate risk is increasingly affecting property values, particularly in areas prone to extreme weather events. Without NOAA’s climate models to anticipate these risks, municipalities and businesses may be left reacting rather than proactively planning, leading to financial distress at a broader scale.
A Cascade of Risks
When key datasets disappear, it’s not just an inconvenience, it triggers a cascade of systemic failures. The foresight frameworks that help us anticipate these risks point to a few key takeaways:
Loss of data weakens our ability to predict risk – This creates uncertainty that spreads across multiple industries.
Uncertainty drives up costs and reduces market participation – Insurance becomes expensive or unavailable, mortgages follow suit, and property values decline.
Economic contraction in affected areas accelerates market distortions – Municipalities face strained muni budgets, credit downgrades and lower muni bond desirability. Mortgage backed securities face higher default rates and increased prepayment risks (report here). Businesses reliant on property markets face revenue shortfalls. All these impacts lead to to region-specific, broader economic strain.
This is not about sounding alarms for alarm’s sake. It’s about ensuring that decision-makers, from investors to policymakers, understand the fundamental importance of climate data in keeping markets functional.
If data access to NOAA’s services are discontinued, we don’t just lose numbers on a spreadsheet. We lose the ability to see the future clearly, and with it, the ability to prepare for what’s coming.
A special thanks to Gopal Erinjippurath, Cool Climate Collective LP and co-founder of Sust Global, for providing feedback to this post & his insights into how climate data is increasingly integrated into financial decision-making. His expertise in geospatial AI applied to risk modeling underscores just how essential robust, accessible datasets are for industries adapting to climate uncertainty. He also points to this National Security Archive report, which highlights past efforts to erase or restrict climate data and the long-term implications of such actions.
For those looking for a more in-depth analysis, foundations_ our research initiative combining collaborative experts and AI-enhanced tools, conducted a Deep Research exploration on the systemic risks tied to climate data accessibility. You can find our full report here.