There will probably be some investment opportunities in seawalls (Representational)

A top investment strategist for JPMorgan Asset Management sent a note to clients earlier this year with a dire forecast. Despite global efforts to stop climate change, sea levels are likely to rise dramatically, threatening the 40 percent of Americans who live along the coast.

On the other hand, there will probably be some investment opportunities in seawalls.

"A storm surge barrier system protecting New York City and parts of New Jersey could cost $2.7 million per meter," Michael Cembalest, the asset manager's chairman of market and investment strategy, wrote in his annual "Eye on the Market" energy newsletter in April. He added that governments would probably struggle to pay that cost, perhaps turning to either bonds or outright privatization.

As the U.S. grapples with a second straight year of record hurricanes, floods, and wildfires, a small but growing number of hedge funds, pension plans, and other investors are testing strategies to take advantage of those signs of climate change. Where they're putting their money provides a glimpse into some of the likely tangible impacts from higher temperatures. The investments include storm and flood protection along the coast, desalination plants in drought-prone regions, new approaches to agriculture, and even land far from the ocean for when rising seas shift the real estate market. "In the early stages, people will be nervous," says Cembalest, who calls himself an advocate for better flood control. "And the returns will be higher."

There's a fatalism to investors' calculations. Global greenhouse gas emissions reached an historic peak last year, along with the concentration of carbon dioxide in the atmosphere. The last three years were the hottest on record. That trend is expected to accelerate: Scientists expect temperatures to rise by 5F to 10F from now to the end of the century. Yet even an increase of as little as 1F will have potentially catastrophic consequences, according to a report issued Monday from scientists convened by the United Nations. The report found that preventing global warming from surpassing that level will require a gargantuan and near-immediate shift in energy use.

"There is no way at this point to stop climate change," says James Everett, partner and co-founder at Ecosystem Integrity Fund, a venture capital investor in San Francisco. "Pretty much every system is going to have to change. We're going to have to adapt to this."

Investors focused on climate change have traditionally bet on fixes, such as renewable power and electric vehicles. Mitigation and adaptation is a grimmer project. But Jay Koh, co-founder and managing director of the Lightsmith Group, a private equity firm focused on climate adaptation, says it's necessary to acknowledge that things could get worse. "There is a requirement for some kind of psychological journey that people have to go through," Koh says. "I'd rather have a strategy designed for the set of circumstances where we might not 100 percent win."

Consider what might happen to food production. As precipitation patterns change and oceans become more acidic, outdoor environments will become less reliable and "more and more intolerant for crops or fish," according to Liqian Ma, managing director at Cambridge Associates in Boston. Demand will increase for technologies that allow indoor agriculture and even aquaculture.

In other cases, making money off climate change can be as simple as thinking through the consequences of a hurricane. Last August, a week before Hurricane Harvey struck Texas, Rod Hinze had an idea. The principal and portfolio manager at Key Point Capital in Dallas, Hinze invests in real estate investment trusts, or REITs. As Harvey approached the coast, the cost of REITs that held hotels around Houston was falling, as investors assumed the hurricane would scare off tourists and business visitors, and maybe trash the hotels themselves. "People thought they'd be offline," Hinze says. "What they don't realize is the demand in short-term housing after a hurricane like that, it's astronomical."

So Hinze bought low-first in Houston, and then, as Hurricane Irma followed a week later, in South Florida. "We saw occupancy go to 100 percent in a lot of those hotels," Hinze says. "We didn't crush it. But we made 25 percent, 30 percent, pretty quick."

The effects of climate change have also increased demand for new and more exotic types of insurance against what Barney Schauble, managing principal at Nephila Advisors LLC, calls "weather risk." Businesses can buy coverage for extreme weather, and Nephila finds investors willing to bear the other side of that risk in various forms. Schauble says his company recently helped a water utility that was worried about increasingly unpredictable precipitation patterns. So it created a product that would protect the utility against swings. "We structured a hedge for them: In this band, your business is fine," Schauble says. "We can price that." That business is exploding. Since last year, the amount of money coming in for extreme-weather protection has doubled.

David Vogel, founder and chief executive officer of the Florida-based quant fund Voloridge Investment Management LLC, says he believes rising seas and worsening storms and droughts will create opportunities in health care, insurance, and agriculture. He declined to discuss his firm's specific investments. But he was willing to disclose one personal purchase: tracts of land around Asheville, North Carolina, where he expects housing values to keep climbing as climate change gets worse. "It's 2,000 feet above sea level," he says. "Living in Florida, that's where I see a lot of people moving."

Some investors who believe climate change will get worse are even applying that premise to municipal bonds. Jonathan Bailey, head of environmental, social, and governance investing at Neuberger Berman Group LLC, says his company analyzes the climate risk facing different cities, aiming to find out which ones are more or less exposed. Credit rating firms have been slow to incorporate those varying levels of risk into bond ratings. As a result, Neuberger can buy and hold bonds issued by cities with lower climate risk without paying a premium over bonds issued by cities facing greater threats from storms and other disasters. "If the market then changes its perception of those relative risks, then that can create an opportunity for us to then sell," Bailey says.

The broader public's failure to appreciate the risks of climate change is part of what makes it such a good area for investing, according to Schauble. He says that's especially true in the U.S. "There is not a single other country where anybody smart isn't a believer in these things," Schauble says. "If you can see something that other people just refuse to see, and you can make decisions on that basis, I suspect over the longer term that is going to put you in good stead."

The fund managers and advisers interviewed for this story expressed little worry that the science is wrong. For some, a bigger concern was looking as if they were taking advantage of a slow-motion calamity. "I would love to give up these investment opportunities in a second if people would listen and stop polluting the environment," Vogel says. In the meantime, he says, investors can be a societal warning system, alerting the public to a risk it has otherwise been reluctant to see. "If people are making money off it, that gets attention."