Climate change could burn agriculture economy

  • Article by: TOM MEERSMAN , Star Tribune
  • Updated: June 24, 2014 - 10:56 PM

A report on climate change endorsed by business leaders says farming and other sectors face big risks in coming years.

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A group of prominent business and political leaders including Cargill Chairman Greg Page said Thursday that agriculture and other major sectors of the economy could face widespread disruptions from climate change in coming decades unless much more is done to reduce the risks.

Their report, “Risky Business,” presents a number of scenarios that could reduce yields of corn and other crops drastically in the nation’s midsection, strain utility systems as hotter summers demand more energy for cooling and flood coastal areas as storms surge and sea levels rise.

“Our economy is vulnerable to an overwhelming number of risks from climate change,” said former Treasury Secretary Henry Paulson, who initiated the study with former New York Mayor Michael Bloomberg and former hedge fund executive Thomas Steyer.

The report does not prescribe specific fixes such as carbon taxes or targeted reductions of carbon dioxide and other greenhouse gases. It lays out the economic risks that range from moderate to severe in different sectors and in different regions of the country if no changes are made, or if different levels of emission reductions occur.

The report concludes that two of the primary impacts of climate change — extreme heat and sea level rise — will disproportionately affect certain U.S. regions. And it suggests that the most severe risks can be avoided by investments and immediate action to reduce the pollution that causes global warming.

Under some scenarios presented in the study, warmer temperatures and longer growing seasons could actually increase crop yields in the Upper Great Plains, including Minnesota, the Dakotas and Canada, during the next 10 or 15 years as the Corn Belt shifts to the north. But the broader picture forecasts average crop yield losses of 15 percent during the next five to 25 years in places like Missouri and Illinois, and up to 73 percent reductions by the end of the century.

Page, one of 10 members of a committee that served as advisers for the report, said in an interview that while climate change is not an emergency, it’s an important issue that needs attention now. The chairman of Minnetonka-based Cargill noted that there is uncertainty about how quickly and extensively the climate may change.

“But that isn’t an excuse to throw up your hands in helplessness and say there’s just so much uncertainty we don’t need to do anything,” he said. “We need to think about and talk about what are all the adaptations ahead.”

For example, if North Dakota starts to produce four tons of corn per acre instead of one ton of wheat, Page said, that will have enormous implications for railroads, seed suppliers and farm equipment companies. If hotter temperatures and more humid weather become more common in Minnesota, that will affect the way livestock barns need to be designed and outfitted as they age and need to be replaced.

As far as trying to reduce the factors that cause climate change, Page said that many farmers already are using computers and other high-tech equipment to reduce fuel use and pollution emissions, and to use water more efficiently. Broader deployment of that technology needs to happen and will happen, he said, because it makes good business sense.

Extreme heat

The report also suggests that extreme temperatures could become a health threat for many in the eight-state Midwest, defined as Minnesota, Iowa, Wisconsin Missouri, Illinois, Michigan, Indiana and Ohio.

Residents in that area typically experience two or three days each summer of temperatures over 95 degrees, the report said. Under a business-as-usual approach where little or nothing is done to reduce greenhouse gas emissions, the Midwest could experience an additional seven to 26 95-plus degree days by midcentury, the report said, and an additional 20 to 75 extreme-heat days by the end of the century.

That in turn would increase the risk of heat stroke, reduce labor productivity, and strain the electric grid, the report says.

In other areas such as the Gulf Coast, Northeast and Southeast, sea level rise and increased damage from storm surges are likely to add $2 billion to $3.5 billion in property losses each year by 2030, according to the report, and much more in the decades beyond that. And it predicts that “if we continue on our current path, by 2050 between $66 and $106 billion worth of existing coastal property will likely be below sea level.”

“The longer we wait to address the growing risks of climate change, the more it will cost us all,” Steyer said in a prepared statement. “From a business perspective, given the many benefits of early action, it would be silly to allow these risks to accumulate to the point where we can no longer manage them.”

Also on the committee were George Shultz, Treasury secretary and secretary of state under Presidents Nixon and Reagan, and Robert Rubin, Treasury secretary in the Clinton administration. The research was done by the Rhodium Group, an economic research firm co-led by climate scientist Robert Kopp of Rutgers University and economist Solomon Hsiang of the University of California, Berkeley.

Page said that given the potential for disruption, it would be “arrogant” to dismiss climate change as an issue, and that society needs to have a “serious conversation about what we can do now to accommodate a whole range of climate change scenarios.”

But he said farmers and their supply chain partners are skilled at adapting to change, and are naturals at taking a long-term, multigenerational approach to their businesses.

The message from agriculture, Page said, is that it will not follow a business-as-usual approach as an industry. “We may well be facing an evolving and uncertain climate and environment,” he said, “but we are highly confident, optimistic and committed to making those innovations and adaptations that give us the flexibility to produce enough food in spite of localized disruptions.”

 

Tom Meersman • 612-673-7388

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