Climate change could turn up the heat on inflation, according to report
Study Warns of Climate-Induced Inflation Surge: Impact on Global Economy
In a recent report by Doloresz Katanich for euronews.com, the looming threat of climate change on inflation takes center stage. A study conducted by the Potsdam Institute for Climate Impact Research reveals alarming projections: annual food inflation could surge by up to 3.2% and overall inflation by 1.18% per year by 2035 due to rising temperatures and extreme weather events. Lead author Dr. Max Kotz emphasizes the significant impact of temperature increases on food prices, particularly in hot regions and seasons. The implications extend beyond economic concerns, affecting human welfare and political stability. The study highlights the 2021-2022 cost of living crisis, which pushed an additional 71 million people into poverty globally, underscoring the urgent need for action. Climate-driven inflation knows no borders, affecting both high and low-income countries. While hot regions at lower latitudes face year-long impacts, high latitudes experience strong seasonal effects, with summers exacerbating price surges. The study also analyzes the 2022 European summer heatwave, demonstrating how extreme events can amplify inflationary pressures. As the global south, especially Africa and South America, braces for heightened impacts, urgent measures are needed to mitigate the economic fallout.
