Is your company losing money due to climate change? Consider moving to the Midwest, survey shows – Inside Climate News

The Midwest is once again being highlighted as a potential refuge from the threats of climate change, which continues to cause increasingly devastating natural disasters around the world.

In the United States, devastating wildfires and hurricanes have sent insurance premiums skyrocketing in states like California and Florida, with some residents recently paying as much as $3,000 a month for home insurance. Rising costs and the threat of extreme weather have prompted people to uproot and move elsewhere – often to the Midwest.

A new study out of Michigan suggests that companies, too, may be looking at America’s heartland as a place to set up a business to reduce the rising costs of global warming.

“The evidence of climate change is growing at breakneck speed,” said Scott Thomsen, CEO of LuxWall, a Michigan-based window manufacturer. “We certainly see that in our industry.”

Thomsen was one of 300 senior executives interviewed in a survey released Sept. 30 by MIT Technology Review Insights and the Michigan Economic Development Corp., or MEDC. All executives working in 14 industries, including retail, financial services and manufacturing, reported that their companies had suffered some degree of damage from climate change. These damages include physical property damage, increased operating costs, rising insurance premiums and disruptions to supply chains.

Three-quarters of survey respondents said their companies were considering moving because of climate risk, and almost a quarter said they had already done so in part because of climate change. About 6 percent said it plans to relocate its operations within the next five years.

Nearly half of survey participants also believe that the Midwest is the region least vulnerable to climate threats.

Thomsen said avoiding exposure to such risks was one of the reasons LuxWall chose to make Michigan home. Founded in 2016, the company considered locating its headquarters in six Midwestern states before settling on Ypsilanti. In August, the company opened a second plant in Litchfield, Michigan, with another planned in Detroit.

“We are really lucky in many ways,” said Hilary Doe, Michigan development director and MEDC chief marketing officer. “Michigan was ranked as the top state for climate change, taking into account drought, extreme heat, wildfires, floods and the like.”

“The evidence of climate change is growing at breakneck speed. We certainly see that in our industry.”

Scott Thomsen, CEO of LuxWall

Doe said some of the “top reasons” companies ultimately choose Michigan are due in part to the state’s abundant natural resources, its relatively resilient power grid and the assistance Michigan provides businesses with climate risk planning, including by helping companies in access to climate-related information financing.

Minnesota has also seen increased business activity in recent years as companies look to expand their operations, said Catalina Valencia, executive director of business development at the Minnesota Department of Employment and Economic Development.

The trend is particularly visible in larger projects, Valencia said. While a $75 million project would have been considered significant a few years ago, she said, the state now allows several projects a year that cost between $100 million and $300 million to build and occasionally cost more than $1 billion. .

Valencia noted that while companies choosing to locate in Minnesota take climate risks into account, the biggest factors drawing new companies to the state are the bipartisan infrastructure bill, the Inflation Reduction Act and other federal investments. Last year, state lawmakers passed legislation providing matching state funding for projects that receive federal money.

As climate change increases in the coming decades, Valencia and Doe expect more businesses to come to their states. “Unfortunately,” Valencia said, Minnesota “may be one of the best-prepared states for the future, and not just now, but in the future.”

The Midwest is often referred to as a “climate paradise,” in part because of its relatively mild climate and proximity to the Great Lakes, which contain one-fifth of the world’s freshwater supply – a resource that scientists predict will become increasingly scarce as the planet warms. The Great Lakes also provide alternative ports for U.S. shipping as increasingly severe hurricanes hamper the transportation of goods from the Gulf and Atlantic coasts.

Extreme weather events cost the United States nearly $150 billion each year in damages, lost business revenues and declining property values, according to the Fifth National Climate Assessment, a federal report on the impact of climate change on the country. The assessment shows that natural disasters causing more than $1 billion in damage now occur on average every three weeks, compared to every four months in the 1980s.

Along the East Coast, from Florida to North Carolina, workers continued to clear debris and shovel mud over the weekend from Hurricane Helene, which killed at least 232 people and lost power to hundreds of thousands. Florida is currently bracing for a second storm, Hurricane Milton, which is expected to make landfall near Tampa later this week at Category 3 strength or higher.

Helene, which made landfall in Florida two weeks ago as a Category 4 storm, has inundated six southeastern states and is now the deadliest U.S. storm since Hurricane Katrina in 2005. Historically warm ocean waters have helped recharge Helene, allowing it to dumping huge amounts of water while traveling north.

In a quick analysis, three scientists from Lawrence Berkeley National Laboratory found that rainfall on Helene Island is a trace of climate change.

“Our best estimates indicate that climate change caused more than 50 percent more rainfall during Hurricane Helene in parts of Georgia and the Carolinas,” Michael Wehner, one of the scientists, wrote in an online statement. “We estimate that the observed rainfall in these areas was as much as 20 times more likely to occur due to global warming.”