‘Heatflation’, or how global warming contributes to rising prices
Hardened mud is seen in front of a small body of water as the region faces a prolonged drought at a dam near Bulawayo, Zimbabwe January 18, 2020. – Reuters pic
Thursday 04 August 2022 21:00 MYT
NEW YORK, August 4 — Episodes of drought, flooding and freezing… There are a wide variety of extreme weather conditions that jeopardize the production of raw materials, and therefore have a direct effect on our wallets! Global warming is now clearly included among the factors leading to inflation. And now the phenomenon has a name: “heatflation”. Mustard shortages due to severe droughts in Canada, the world’s largest producer and exporter of mustard seed; declining stocks of chickpeas, of which US supplies have declined by 10% over the past two years; the soaring temperatures in northern Italy which jeopardize the cultivation of arborio rice (used in risotto), as well as that of tomatoes and olives; plus the deterioration of Brazilian crops, down nearly 30% due to frost or flooding, which drive up coffee prices.
Around the world, crop failures of a range of foods are making headlines, many of them so severe that several potential shortages are predicted. At best, weather disasters push up prices, explained Nicolas Léger, who works for the international firm NielsenIQ, in an interview with the ETX Studio news agency. “Weather conditions explain the inflationary prices observed in a large number of food categories.” The expert clarified that the price spike cannot be primarily attributed to the situation resulting from Russia’s invasion of Ukraine, except in the cooking oil category.
We have been warned…
Scientists have been warning consumers for years that global warming – if not effectively slowed – will not only have dramatic effects on the planet’s resources, but will also have financial consequences. A few days ago, the American environmental magazine Grist even used a neologism to define the phenomenon: “heatflation” – contraction of “heat” and “inflation”. The article was based on the words of David A. Super, a law professor at Georgetown University in the United States, who had previously told The Hill media that “if we want to control inflation, we must tackle to climate change now”.
As Europe faces another heat wave, the European Central Bank’s previous warning of unusual temperatures leading to medium-term inflation rings true. The analysis was included in a report published last December and covered no less than 48 countries. We cannot feign ignorance, because last February, the famous American magazine The Atlantic already called this climato-economic phenomenon “Greenflation”. It remains to be seen which crops and food products will be affected next. — Studio ETX