Evaluating the economics of climate risk for Midwest Ag

New report provides analytical tools for agriculture industry to properly prepare for the risks associated with climate change.

Extreme weather events could become the “new norm” for Midwest region if the U.S. stays on its current greenhouse gas emission pathway, according to a risk-assessment analysis report released by the Risky Business Project.

Heat in the Heartland: Climate Change and Economic Risk in the Midwest details how the impact of changing climate could possible disrupt the Midwest’s agriculture economy.

"A changing climate will present new risks and new opportunities as we face the complex task of producing enough food, feed and fuel for a world on its way to 9 billion people. Given the importance of the Midwestern United States to the world's agricultural production, it would be irresponsible to dismiss these projections lightly," said Greg Page, Cargill executive chairman and Risky Business Project Risk Committee member.

The report shows that communities, industries, and properties across the region face profound risks from climate change. These impacts could affect transportation, labor productivity, energy use and agriculture. However, the report concludes that the most severe risks can still be avoided through early investments in resilience, and through immediate action to reduce the pollution that causes global warming.

Page joined Henry Paulson, former U.S. Secretary of the Treasury and Risky Business Project co-chair in presenting the report findings to the Economic Club of Minnesota in Minneapolis.

Paulson told the Economic Club of Minnesota the Risky Business project was opportunity to fill knowledge gap about climate change in the U.S. 

“Climate had been talked about primarily in the language of science or the environment,” said Paulson “It is a very real economic issue.  This was an opportunity to give business leaders the tools they need to better understand the risk associated with climate.”

The report does not give one set prescription for businesses but rather provides set of analytic tools for measuring potential risk and outcomes of a changing climate.

In general, the report lists the generalizations of the Midwest’s reaction to climate change.

According to the report, the region may likely see two to five times more days over 95 degree F and increase in humidity in given year.  In addition, changes in precipitation patterns will most likely also occur.

Moreover, the bearing of increase heat, more humidity and changes in precipitation could have positive or negative effect on agriculture depending on the state, county or even the crop.

“Are we in situation were increasing global Co2 levels are loading the dice against us in Midwest agriculture?” was the question Page proposed to all of agriculture.

Agriculture, realistically, could be faced with the probability that productive level could be adversely impacted if the sector and its related businesses do not prepare and adapt, said Page.

He did recognized the resilience and adaptability that the world’s farmers have already demonstrated and optimistic that the agriculture community can feed the world using natural resources responsible.

“To preserve and strength the global food system resilience in the face of climate change, we need to invest in innovation, maintain open borders and rapidly and responsibly disseminate agriculture technology that both improves productivity and protects the environment,” explained Page.

He concluded, “The Risky Business Midwest report should encourage businesses and political leaders in the region to think long-term about the actions we can take starting today to prepare the Midwest to deal with a range of climate uncertainties and scenarios.”   

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