2011 was the second costliest year for weather events with 14 disasters resulting in more than $1 billion in damages. Although there were numerous fatalities, many lives were saved as a result of better forecasts that were fed by higher quality data from observing systems on orbit, in the air column and on the ground. The bottom line is that accurate weather data saves lives and protects property.

As new weather data models emerge, however, the issue of who pays for weather observations is becoming a growing topic of debate.

The U.S. model of free and open data has meant that the taxpayer has funded polar and geostationary satellites that have undergirded much of the forecast improvement at home and abroad. Traditional surface and upper air observations taken by the National Weather Service (NWS) provide a backbone for weather analysis. But will new models change this dynamic?

The traditional paradigm of government funded observations has served the public well. It has provided infrastructure that created a commercial weather enterprise in the U.S. that returns money to the Treasury through tax revenue. The access to free data and the ability to exploit that data has allowed the private sector to provide support and services that not only helps them and their customers generate revenue or save money, but in turn stimulates the economy and creates jobs.

In essence, public weather data and a strong partnership between the public and private sectors have helped to create a mutually beneficial profit center within the federal government just as GPS has done for navigation.

However, the private sector’s increasing abilities to provide data that compliment and in some cases replace government data suggest that we are at the dawn of a new weather data age.

This expansion of private sector capabilities – from exploiting freely available data to collecting and perhaps even owning the data from private systems – could alter traditional boundaries in the public-private forecasting space and carries implications for who pays for the observation systems that make the collection of weather data possible.

So what does this mean moving forward?

The government, through the NWS, is responsible for protecting life and property by providing forecasts and warning support of weather conditions in the United States. The U.S. taxpayer pays only $3 per year to obtain this government weather capability with a reach that impacts 1/3 of GDP on a daily basis. Weather satellites are expensive and few if any commercial companies are willing to build one without government funding or significant guarantees that the government will buy the data. It is highly unlikely that any private entity will fly its own weather satellite in the foreseeable future. Companies will continue to rely on the government to fulfill that role.

But there is a limit to the government’s support. The NWS can forecast high-impact events like tornadoes and floods, but current systems were not designed to meet the demand for information created by today’s networked age. For instance, the NWS can forecast rain for an area, but they can’t provide a tailored forecast for a retailer hosting a sidewalk sale predicting it will rain at their specific location at three o’clock.

Today, consumers are demanding hyper local weather products and services that require a much higher density of observations than the government can provide. Residents along a coastline are no longer just looking for hurricane warnings and predictions. People want a forecast for their exact location and remote access to cameras to see if their house survived a land-falling storm.

Technology has changed the realm of the possible in weather and the private sector has a key role in meeting this demand in ways that fulfill the needs of the consumer yet provide a return for the government who help make all of these capabilities possible.

The demand for these kinds of hyper-local services will only increase. We now live in an age where every smartphone is not only a tool for dissemination but is also an observing platform itself.

Companies are installing small but powerful weather sensors on rooftops and even on vehicles that provide reliable and accurate data for the NWS, but also have applications for a range of other industries, like transportation and agriculture. Other companies are developing wind sensors that not only help energy companies improve production from wind turbines, but also can be used for better localized forecasts of thunderstorms and severe weather.

Regardless of where the data comes from, there is universal recognition that it is the value of the data that is critical to improving forecasts at all spatial and temporal resolutions.

Unfortunately, the improvements to weather forecasting over the years have been lost on many, and few people recognize that the data is derived from an observing platform that has to be paid for by either the public or private sector. But with a rise in the demand for advanced weather intelligence as well as the cost of the observation systems that collect the data, this will likely change.

So what is the price point for weather data when it comes to saving a life and protecting property?

In the near future, this question will increasingly be tied to where the data come from and if it is tied to a viable business model. People know all too well the value of their time, and weather is a critical component to the most productive use of that time, be it with family or at work. This realization is why weather products are exploding with applications that apply to a wide range of activities. Failure to maintain the weather enterprise on either side of the observational equation results in a lack of data that can pose an unacceptable risk that may cost lives.

We must remember that all of this weather information is the result of a robust observing network whose shared responsibility lies in both the public and private sectors. The government will continue to lead in the deployment of major observing systems, but the private sector can fill gaps where they can generate revenue and as a result increase their stake in the future of the weather observation enterprise.

But there will be a price to pay for that information provided by a private sector capability. We must come to recognize that while the value is in the data, the observation that creates the data is not free.

Randy Bass is a senior meteorologist and Scott Rayder is the business development lead for environmental intelligence at ITT Exelis.)