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Climate Alpha wants to tell you where to move in light of global warming – Axios

A new climate software firm that’s announcing itself to the world on Tuesday says it has a competitive edge that other companies lack.

The big picture: Climate Alpha, which just raised a $4 million seed round, uses AI and machine learning to tell customers where to invest and move to in light of climate change and other factors.

  • Other firms focus on where to avoid, says its founder and CEO, Parag Khanna.

Driving the news: Climate impacts like sea level rise and extreme weather events will interact with socioeconomic trends and other developments to make places more or less desirable places to live.

Zoom in: Climate Alpha uses software to consider as many drivers as possible that could affect real estate values in a warming world.

  • The result, Khanna told Axios, is a guide to where businesses, governments, individual homeowners and others should invest for a more resilient future.
  • Other companies right now are focused on identifying climate risk, rather than adaptation opportunities, he said.
  • Climate Alpha’s customers and partners include the homebuilder Lennar and asset manager BentallGreenOak.

Between the lines: Climate Alpha’s models include all U.S. ZIP codes, with different algorithms for each property type.

  • The company forecasts real estate values for every year out to 2040 under various climate scenarios.
  • Through a partnership with Mastercard, cities may use Climate Alpha’s “Resilience Index” platform to prioritize where to spend resilience grants and funds for public housing, Khanna said.

Of note: The company began as research for Khanna’s latest book, “Move: The Forces Uprooting Us,” and spun out of another of his ventures, FutureMap.

What they’re saying: “The climate analytics industry has been focused on telling people where they’ll need to sell, but not where they should buy,” Khanna told Axios via email.

  • One advantage to his company’s approach, he says, is that it incorporates factors far afield from climate.
  • “Risk analytics alone don’t predict consumer behavior, otherwise nobody would move to Miami or Phoenix,” he said. Its models include other relocation influences, such as affordability and tax rates.

Yes, but: Climate Alpha is predicated on a bet that proactive relocation can keep Americans a step ahead of the climate.

  • However, this rests in part on the rate of global warming being manageable.
  • Nasty surprises, such as tipping points, lurk within the climate and are difficult to model.
  • In addition, growing inequality could limit America’s resilience.
  • Lastly, a big wild card will be how the millions of climate refugees worldwide will affect geopolitics.

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