Food prices and overall inflation will rise as temperatures rise due to climate change, according to a new study by environmental scientists and the European Central Bank.
Looking at monthly prices of food and other goods, temperatures and other climate factors in 121 countries since 1996, researchers estimate that "weather and climate shocks" will cause food costs to rise by 1,5 to 1,8 percentage points per year within a decade or so. Rates will be even higher in already hot places like the Middle East, according to one study in the journal Communications, Earth and the Environment released Thursday.
And that translates into an increase in headline inflation of 0,8 to 0,9 percentage points by 2035, caused precisely by climate change and extreme weather, the study says.
Those numbers may seem small, but for inflation-fighting banks like the Federal Reserve, they're significant, said study leader Max Kotz, a climate scientist at Potsdam Institute for Climate Impact Research at Germany.
"The natural effects of climate change will have a persistent effect on inflation," Kotz said.
"This is really in my view another example of one of the ways that climate change can undermine human and economic well-being."
