Climate Change, Inflation, and the Ecological Transition: Understanding the Intricate Links for a Sustainable Future
Climate change drives up supply chain prices in Europe, impacting essential goods like food and energy.
Image by Mark Stebnicki
In Europe, intricate links between climate change and inflation have emerged as escalating climate events drive up prices for essential goods like food and energy, impacting supply chains and human capital. While vital for combatting climate change, the ecological transition introduces inflationary pressures through higher fossil fuel taxes and surging demand for energy sources and raw materials. However, this transition comes at the cost of inflation, potentially deterring urgent climate action due to higher costs and reluctance from authorities and central banks. To ensure a successful transition, proactive public action and embracing the circular economy concept are imperative. Understanding these connections is crucial in navigating climate change and inflation challenges for a sustainable and resilient future.
SOURCE: For a comprehensive insight, read the full article by The World Bank
