Higher temperatures mean higher food and other prices. A new study links climate shocks to inflation
Climate change is projected to increase food prices and overall inflation as temperatures rise, with hotter regions experiencing more severe impacts.
- Bilawal Riaz
- 1 min read
A new study by an environmental scientist and the European Central Bank projects that food prices and overall inflation will rise as temperatures increase due to climate change. The research indicates that climate-related factors will lead to a 1.5 to 1.8 percentage point annual increase in food costs within a decade or so, with even higher impacts in hot regions like the Middle East. By 2035, this could result in an overall inflation rise of 0.8 to 0.9 percentage points. As climate change progresses, global food prices are expected to spike by 2.2 to 4.3 percentage points annually by 2060, correlating to a 1.1 to 2.2 percentage point increase in overall inflation. The study underscores the connection between extreme weather events, like heatwaves, and escalating prices, emphasizing that such impacts are more severe in hotter regions and seasons.