Climate change driving up inflation in food prices: Study
Rising global temperatures are associated with inflation in food prices, both in regions that are already hotter and in countries outside the tropics like the U.S., according to a study published in the journal Communications Earth & Environment.
Researchers from the Potsdam Institute for Climate Impact Research and the European Central Bank studied monthly price indexes between 1996 and 2021 in 121 countries. The study found food prices are the monthly inflation signal most strongly associated with the climate, which researchers attributed to the supply shocks associated with temperature increases. Both new milestones for extreme heat and shifts in average temperatures are associated with longer-term inflation. In European countries, where the summer of 2022 broke temperature records, that heat was accompanied by food inflation increases of 0.43 percentage points to 0.93 percentage points.
The research also projected that between now and 2035, those same temperature increases could lead to “climateflation” increases of up to 3 points. The same European food inflation driven by last year’s extreme heat in Europe would be amplified 30 percent to 50 percent in 2035, according to modeling for that year’s temperature increases.
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