Climate change impacts are being felt in unexpected places, such as the grocery store. Over the past four years, food prices have increased by 25 percent, leading to higher costs for staple items like beef, sugar, and citrus.
While various factors, including supply chain disruptions and labor shortages, have contributed to this rise in prices, a recent study published in the journal Communications Earth & Environment warns that extreme heat is already causing food prices to rise. According to the study, heatflation could result in a 3 percent annual increase in food prices globally within a decade, and a 2 percent increase in North America. Additionally, extreme weather events could lead to an annual inflation rate increase of 0.3 to 1.2 percentage points depending on countries’ carbon emissions levels.
Despite seeming like a small increase, climate economist Gernot Wagner from Columbia Business School notes that it is significant, accounting for half of the Federal Reserve’s target of 2 percent inflation. Recent data from the Labor Department shows a 3.2 percent increase in consumer prices over the past year.
The correlation between heatwaves and rising food prices is clear. For example, when Europe experienced intense heatwaves in 2022, it exacerbated already soaring food prices caused by Russia’s invasion of Ukraine, leading to a record 9.2 percent inflation in Europe. The study suggests that the summer heat alone, which impacted soy, sunflower, and maize harvests, contributed nearly a full percentage point to the inflation rate.
The study’s analysis of monthly price indices across 121 countries over the past 25 years indicates that no region is immune to the impacts of climate change on food prices. North Africa and the Middle East are expected to face significant price shocks due to the already high temperatures affecting crop yields in these regions.
Given the study’s results, Wagner believes that subsequent research might reveal even higher forecasted inflation rates. This poses a worrying future for food affordability, with climate-induced inflation potentially causing widespread economic dislocation.
The connection between climate change and rising prices, dubbed “climateflation,” was highlighted in 2022 after the onset of the Ukraine conflict. The terms “heatflation,” focusing on temperature-induced inflation, and “climate change” were coined to differentiate the direct impact of extreme heat on pricing.
The study did not find a significant association between precipitation shifts and inflation. This research lends legitimacy to President Biden’s 2022 climate change bill, the Inflation Reduction Act, underscoring the importance of mitigating climate-induced inflation in the future.
Grist and reviewed and distributed by Stacker Media.
