HEAT in the HEARTLAND: CLIMATE CHANGE and ECONOMIC RISK in the MIDWEST HEAT in the HEARTLAND: Climate Change and Economic Risk in the Midwest

January 2015 HEAT IN THE HEARTLAND: CLIMATE CHANGE AND ECONOMIC RISK IN THE MIDWEST HEAT IN THE HEARTLAND: Climate Change and Economic Risk in the Midwest A Product of the Risky Business Project: Co-Chairs: Michael R. Bloomberg, founder, Bloomberg Philanthropies; 108th Mayor of the City of New York; founder, Bloomberg L.P. Henry M. Paulson, Jr., Chairman of the Paulson Institute; former U.S. Secretary of the Treasury Thomas F. Steyer, retired founder, Farallon Capital Management LLC Risk Committee Members: Henry Cisneros, Founder and Chairman, CityView Capital; former U.S. Secretary of Housing and Urban Development (HUD); former Mayor of San Antonio Gregory Page, Executive Chairman, Cargill, Inc. and former Cargill Chief Executive Officer Robert E. Rubin, Co-Chairman, Council on Foreign Relations; former U.S. Secretary of the Treasury George P. Shultz, Thomas W. and Susan B. Ford Distinguished Fellow at the Hoover Institution; former U.S. Secretary of State; former U.S. Secretary of the Treasury; former U.S. Secretary of Labor; former Director, Office of Management and Budget; former President, Bechtel Group Donna E. Shalala, President, University of Miami; former U.S. Secretary of Health and Human Services Olympia Snowe, former U.S. Senator representing Maine Dr. Alfred Sommer, Dean Emeritus, Bloomberg School of Public Health; University Distinguished Service Professor, Johns Hopkins University © 2015 Risky Business January 2015 HEAT IN THE HEARTLAND: CLIMATE CHANGE AND ECONOMIC RISK IN THE MIDWEST ACKNOWLEDGEMENTS Lead Author Kate Gordon, drawing from independent The research team’s work was reviewed by an indepen- research commissioned by the Risky Business Project. dent Risky Business Expert Review Panel composed of Additional Authors Matthew Lewis, Jamesine Rogers, leading climate scientists and economists. A full list of the and Fiona Kinniburgh. expert review panel is available on Rhodium’s website. Research In 2013, Risky Business Project co-chairs Funding This Midwest-specific Risky Business Project Michael R. Bloomberg, Henry Paulson, and Tom Steyer report would not have been possible without the finan- tasked the Rhodium Group, an economic research firm cial support of the John D. and Catherine T. MacArthur that specializes in analyzing disruptive global trends, with Foundation, the Joyce Foundation, and the McKnight an independent assessment of the economic risks posed Foundation. by a changing climate in the U.S. Rhodium convened a research team co-led by Dr. Robert Kopp of Rutgers University and economist Dr. Solomon Hsiang of the University of California, Berkeley. Rhodium also part- nered with Risk Management Solutions (RMS), the world’s largest catastrophe-modeling company for insurance, reinsurance, and investment-management companies around the world. The team leveraged recent advances in climate modeling, econometric research, private sector risk assessment, and scalable cloud computing (process- ing over 20 terabytes of climate and economic data) to provide decision-makers with empirically-grounded and spatially-explicit information about the climate risks they face. The team’s original assessment1, along with techni- cal appendices, is available at climateprospectus.org. Interactive maps and other content associated with the Risky Business Project are located at riskybusiness.org. TABLE OF CONTENTS 02 Executive Summary 29 Cincinnati, Columbus, & Dayton 07 Introduction 31 Chicago 11 Results: General Regional Trends 33 Des Moines 15 Midwest Agriculture and Climate 35 Cleveland & Toledo Risk 37 Minneapolis-St. Paul 21 Results by Metro Area 39 Madison & Milwaukee 22 St. Louis 41 Detroit 24 Kansas City 43 Additional Climate Risks 27 Indianapolis 47 Conclusion: Mitigating Risk EXECUTIVE SUMMARY The Midwestern United States2 is called “the Heartland” The mission of the Risky Business Project is to quan- for a reason. The region is our nation’s center for com- tify the economic risks to the U.S. from unmitigated modity agriculture, manufacturing, and transportation climate change. Our inaugural report, Risky Business: The logistics. It’s also home to vibrant cities, dense forests, Economic Risks of Climate Change in the United States,3 and countless tributaries and lakes. All told, it is one of highlighted these risks across every region of the coun- the most economically productive regions of America. try, with a focus on three sectors: agriculture, energy demand, and coastal infrastructure. We also looked at But climate change puts that productivity at risk. While overarching issues such as changes in labor productivity, this is an area accustomed to dramatic weather events, heat-related mortality, and crime. This follow-up report, the extremes that are likely to come with climate Heat in the Heartland: Climate Change and Economic Risk change are on an entirely different scale for the region’s in the Midwest, zeros in on the Midwest and offers a first businesses, communities, and overall economic health. step toward defining the range of potential economic Rising heat resulting from increased greenhouse gas consequences to this particular region if we continue on 4 emissions is likely to affect the Midwest region’s ten our current greenhouse gas emissions pathway. major metropolitan areas through higher heat-related Our research combines state-of-the-art climate science mortality, increased electricity demand and energy projections through the year 2100 (and beyond in some costs, and declines in labor productivity. Meanwhile, cases) with empirically-derived estimates of the impact without significant adaptation on the part of Midwest of projected changes in temperature and precipitation farmers, the region’s thriving agricultural sector—par- on the Midwest economy. We analyze not only those ticularly in the southern states—is likely to suffer yield outcomes most likely to occur, but also lower-proba- losses and economic damages as temperatures rise. bility, higher-cost climate futures. These are the “tail In addition, potential changes in the intensity, form, and risks,” most often expressed here as the 1-in-20 chance timing of precipitation in the region—including snowfall, something will occur. Unlike any other study to date, we rain, and evaporation off the Great Lakes and Missis- look at climate impacts at a very geographically granular sippi River—will pose challenges for regional infrastruc- level, in some cases providing county-level results. ture managers, farmers, and businesses. 2 EXECUTIVE SUMMARY Our findings show that if we stay on our current emis- • By the end of this century, dangerous levels of sions path, the Midwest will likely experience signif- extreme heat are likely across the southern Midwest. icant economic impacts from climate change. These »»By the end of this century, the average Missouri changes are both negative and positive, varying greatly resident will likely experience 46 to 115 days above from the southern to the northern parts of the region. 95°F in a typical year—about as many extremely hot However, if the region chooses a different path—if days as the average Arizonan has experienced each state and regional policymakers and business leaders year in recent decades. There is a 1-in-20 chance that act aggressively to adapt to the changing climate and Missouri will experience more than 125 such days by also to mitigate future impacts by reducing their own the end of the century. carbon emissions—the Midwest can demonstrate to our »»Summer average temperatures in Minnesota, national and global political leaders the kind of strong Wisconsin, and Ohio are expected to be hotter by response that is necessary to reduce the worst future century’s end than average summer temperatures in economic risks from climate change. Washington, D.C., today. Heat in the Heartland—Extreme Heat Likely to Hit »»The average Chicago resident is expected to experi- Midwest Agriculture, Manufacturing, and Cities ence more days over 95°F each year by century’s end than the average Texan does today, with a 1-in-20 As a region, the Midwest is home to nearly one in five chance that these extremely hot days will be more Americans and includes many of the nation’s most than double Texas’s average. populous cities, including Chicago, Minneapolis-St. Paul, Indianapolis, Columbus, Detroit, Milwaukee, Kansas City, »»Rising humidity combined with increased heat Cleveland, and St. Louis. The region is also known for across the region will likely mean more frequent both agriculture and energy-intensive manufacturing: days that reach extremes on the “Humid Heat Stroke 7 The Midwest is responsible for 65% of U.S. production of Index.” There is a 1-in-20 chance that the city of corn and soybeans,5 a significant share of the national Chicago will experience more than 10 days per year wheat crop, and about a third of all U.S. manufacturing by the middle of this century with heat and humidity operations.6 conditions similar to the heat wave of 1995, which caused approximately 750 deaths. Without action, climate change will lock in extreme tem- • Northern Midwest states may see fewer deaths as perature increases across the Midwest, bringing severe winters warm—but also fewer fish, and less winter risks to the southern states’ economies, and potentially recreation. some moderate temperature and agricultural benefits to states in the northern part of the region. These risks »»By the end of this century, only two upper Midwest include: states (Minnesota and Wisconsin) are expected to have average winter temperatures below the freezing mark. 3 EXECUTIVE SUMMARY Figure 1: Average Days Over 95°F: A Departure From the Norm Average days per year over 95°F 2020–2039 2040–2059 2080–2099 Median 1-in-20 Chance 250 On our current path, the U.S. will likely see 200 175 significantly more days above 95°F each year. Some 150 states will be hit harder by extreme heat than others, 125 and the Midwest in particular will experience rising 100 temperatures in terms of warmer winters rather 75 than unbearable summers. But by the end of the 50 century, the average Midwesterner will likely see 22 35 to 77 days per year over 95°F, compared to only 3 20 on average over the past 30 years.

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