Is the Midwest a ‘climate haven’? Business owners certainly think so

The Midwest is once again being highlighted as a potential refuge from the threats of climate change, which continues to fuel increasingly destructive 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 reporting paying as much as $3,000 per month for home insurance. Increasing costs and the threat of extreme weather have prompted people to uproot their lives and move elsewhere—often to the Midwest.

Now a new survey out of Michigan suggests that businesses, too, may be eyeing America’s heartland as a place to set up shop in order to reduce the mounting costs associated with global warming.

“The evidence of climate change is growing like a crescendo,” said Scott Thomsen, CEO of LuxWall, a Michigan-based window manufacturer. “We’re certainly seeing it in our industry.”

Thomsen was one of 300 senior-level executives interviewed in a survey released September 30 by MIT Technology Review Insights and the Michigan Economic Development Corp., or MEDC. The executives, who work across 14 industries, including retail, financial services, and manufacturing, all reported that their companies have been harmed to some degree by climate change. Those harms include physical damage to property, increased operational costs, rising insurance premiums, and disruptions to their supply chains.

Three-quarters of the survey respondents said their companies have considered relocating due to climate risks, with nearly a quarter saying they’ve already relocated in part because of climate change. About 6% said they plan to move their businesses within the next five years.

Nearly half of the survey participants also believe the Midwest is the nation’s least-vulnerable region when it comes to climate risks.

Avoiding exposure to these risks was one reason LuxWall chose to call Michigan home, Thomsen said. Founded in 2016, the company considered six Midwestern states for its headquarters before deciding on the city of Ypsilanti. In August, the company opened its second factory in the Michigan town of Litchfield, with another facility planned for Detroit.

“We’re really lucky in most ways,” said Hilary Doe, chief growth officer and head of marketing for MEDC. “Michigan has been ranked the best state for climate change when considering drought or extreme heat, wildfires, flooding—that kind of thing.”

Doe said that some of the “core reasons” companies ultimately choose Michigan is in part because of the state’s abundant natural resources, its relatively resilient power grid, and the assistance Michigan provides businesses when planning for climate risks, including by helping companies access climate-related funding.

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

The trend is particularly noticeable when it comes to larger projects, Valencia said. While a $75 million project would have been considered significant a few years ago, she said, the state now attracts a handful of projects each year that cost between $100 million and $300 million to build, with an occasional project that costs upward of $1 billion.

Valencia noted that while companies do consider climate risks when choosing to locate in Minnesota, the biggest factors attracting new business to the state have been the Bipartisan Infrastructure Law, the Inflation Reduction Act, and other federal investments. Last year, state lawmakers passed legislation that provides matching state funds for projects receiving federal money.

As climate change accelerates in the coming decades, Valencia and Doe expect more businesses to flock to their states. “Sadly,” Valencia said, Minnesota “may be one of the best positioned states for the future, and not only right now, but more so into the future.”

The Midwest is often described as a “climate haven,” in part because of its relatively mild climate and its proximity to the Great Lakes, which contain one-fifth of the world’s fresh water—a resource that scientists say will become more scarce as the planet warms. The Great Lakes also provide alternative shipping ports from the U.S. as increasingly powerful hurricanes make it harder to ship goods from the Gulf and Atlantic coasts. (Still, as the devastating flooding in Asheville, North Carolina, shows, even supposed climate havens can be wracked by climate change.)

Extreme weather events cost the U.S. nearly $150 billion every year in damages, lost business revenue, and falling property values, according to the Fifth National Climate Assessment, a federal report on the ways climate change is affecting the country. Natural disasters that cause more than $1 billion in losses now occur every three weeks on average, compared to every four months back in the 1980s, the assessment says.

Along the East Coast, from Florida to North Carolina, workers continued to clear rubble and shovel mud over the weekend in the wake of Hurricane Helene, which has left at least 232 people dead and knocked out power for hundreds of thousands of people. Florida is now preparing for a second storm, Hurricane Milton, expected to make landfall near Tampa at Category 3 strength or higher.

Helene, which made landfall in Florida as a Category 4 storm two weeks ago, inundated six Southeast states and is now the deadliest U.S. storm since Hurricane Katrina in 2005. Historically warm ocean waters helped to supercharge Helene, allowing it to dump massive amounts of water as it traveled northward.

Running a rapid analysis, three scientists from the Lawrence Berkeley National Laboratory said Helene’s rainfall bore the fingerprint of climate change.

“Our best estimate is that climate change caused over 50% more rainfall during Hurricane Helene in some parts of Georgia and the Carolinas,” Michael Wehner, one of the scientists, wrote in a statement online. “We estimate that the observed rainfall was made up to 20 times more likely in these areas because of global warming.”

This article originally appeared on Inside Climate News. It is republished with permission. Sign up for their newsletter here.