Heat waves and drought have impacted agricultural production around the world over the last few decades: in Europe, researchers estimate that heatwaves have reduced yields for cereal crops by over 7% on average.1 In the United States, a recent example includes 2022, when California’s rice harvest was half of normal, and farmers across the U.S. lost large portions of tomato, corn, cotton, and red winter wheat crops.2

The situation is likely to worsen. One study suggests that without significant adaptation, each additional degree Celsius increase in global mean temperature could lead to yield decreases of 6% on average for wheat, 3.2% for rice, 7.4% for maize, and 3.1% for soybeans.3 The study authors note that these four crops collectively comprise up to two-thirds of global caloric intake. The potential impacts of these losses could be vast. Food insecurity and shortage could lead to geopolitical tension, as people and nations compete for scarcer resources.

ICE Sustainable Finance combines the ICE Global Heat Model with data on crop growing seasons around the globe to project the average number of “killing degree days”— the number of total degrees that average daily temperatures rise above 30ºC during crop growing seasons, a level of heat detrimental to many crops, under three different climate change scenarios: the International Panel on Climate Change’s Shared Socioeconomic Pathways 1-2.6 (the “Sustainability” pathway, with global emissions declining to net-zero by 2050), 3-7.0 (the “Regional Rivalry” pathway, with global emissions roughly doubling by 210), and 5-8.5 (the “Fossil-fueled development” pathway, with global emissions roughly doubling by 2050). These projections will enable investors and other stakeholders in sovereign and global corporate bond markets to understand the potential long-term impacts of climate change on agricultural productivity around the world.

ICE Sustainable Finance projections of the average number of Killing Degree Days—total number of degrees over 30ºC during crop growing seasons on an annual basis—under the SSP 5-8.5 emissions scenario from 2023 to 2100. Source: ICE Sustainable Finance as of 10/1/2023.