By SETH BORENSTEIN (AP Science Writer)
According to a new study conducted by an environmental scientist and the European Central Bank, as temperatures rise due to climate change, food prices and overall inflation will also increase.
After analyzing the monthly prices of food and other items, as well as temperatures and other climate factors across 121 countries since 1996, researchers predict that “weather and climate shocks” will cause food prices to escalate by 1.5 to 1.8 percentage points annually within about ten years. The increase will be even higher in already hot regions like the Middle East. This was outlined in a study published in the journal Communications, Earth and the Environment on Thursday.
This increase in food prices will result in an overall inflation rise of 0.8 to 0.9 percentage points by 2035, as a consequence of extreme weather due to climate change, the study stated.
While these numbers may seem small, they are significant to institutions like the U.S. Federal Reserve that combat inflation, remarked study lead author Max Kotz, a climate scientist at the Potsdam Institute for Climate Impact Research in Germany.
Kotz explained, “The physical impacts of climate change will have a lasting effect on inflation. This is another example of how climate change can undermine human economic welfare.”
The study indicated that by 2060, the portion of inflation triggered by climate change is expected to grow, with global food prices projected to rise by 2.2 to 4.3 percentage points annually, resulting in a 1.1 to 2.2 percentage point increase in overall inflation.
Gernot Wagner, a climate economist at Columbia University’s business school, who was not involved in the research, commented that what he refers to as “climateflation” is “quite real and the numbers are quite significant.”
Kotz and economists from the European Bank examined 20,000 data points to establish a real-world cause-and-effect relationship between extreme weather, particularly heat, and price increases. They then examined future climate change projections and observed the potential impact on prices.
According to Kotz, when economists typically discuss inflation and climate change, they focus on the rise in energy prices in response to efforts to reduce global warming, but that is only part of the issue.
Kotz stated, “Productivity is affected by climate change-induced weather events, such as heatwaves, leading to reduced agricultural productivity. These also have a ripple effect on food inflation and overall inflation.”
The study cited the 2022 European heat wave as a prime example. The high temperatures decreased food supplies, causing food prices to increase by two-thirds of a percentage point and overall inflation to rise by approximately one-third of a percentage point, Kotz stated. Prices rose even further in Romania, Hungary, and parts of southern Europe.
Frances Moore, an environmental economist at the University of California, Davis, who was not part of the study, commented, “I find the main finding on the historical connection between regional temperature anomalies and national inflation to be credible. The findings are significant. Price fluctuations in essential goods like food are very burdensome for consumers.”
Kotz said the study discovered that the increase in prices for food and other items is more severe in regions and times that are hotter. Kotz mentioned that Europe and North America may not be impacted as much as the Global South, which may have more difficulty affording it.
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