Betfair has launched a series of innovative betting markets which will provide clear indications of how public opinion views the on-going debate about climate change, by allowing people to speculate on climate indices developed to track the extent (or otherwise) of global warming.
Betfair’s exchange model will create a market price for climate change related outcomes, including the HSBC Investable Climate Change Index, the ECX CFI Futures Contract, and Highest and Lowest UK Temperature. The commission that Betfair earns from operating these markets will be ring-fenced and invested in the development of technologies to tackle the wider issue of climate change.
In what is a major blow to prediction markets supporters, the Betfair press release refers to aggregating market mechanisms as “-decision markets”-, rather than “-prediction markets”–
‘Decision markets’ have historically proved to be accurate gauges of political, economic and cultural change and better forecasters of the future than opinion polls and expert forecasts. Efficient market theory suggests that these climate markets will be the best aggregation of all the available information on the subject. This is the ideal place for experts, academics, businesses and interested parties to put money behind their views on long-range forecasts.
It remains to be seen how Chris Masse responds to the Betfair announcement.
[External Links: HSBC Climate Index + Carbon Futures + Highest and Lowest UK Temperature Futures]