As the climate breaks down, costs go up: Welcome to 'climateflation'
If you ask an economist why everything is so expensive these days, you will likely get an answer explaining how oil—the lifeblood of the global economy—is currently facing supply bottlenecks in the Strait of Hormuz, thereby driving up global energy prices.
The article explores a new concept called "climateflation," which examines how climate change and efforts to mitigate it are driving up costs in various aspects of everyday life. The authors argue that global warming, caused by the burning of fossil fuels, has led to extreme weather events, increased agricultural failures, and more frequent natural disasters. These events have resulted in higher public health costs, productivity losses, and damage to infrastructure.
The authors also note that the global economy's heavy reliance on fossil fuels has contributed to supply bottlenecks in the Strait of Hormuz, driving up oil and gas prices. They suggest that if climate mitigation efforts had been more serious 35 years ago, today's conflict in Iran would have had less impact on everyday prices.
The article further explains that much of modern infrastructure was built with a more stable climate in mind, leading to a lack of climate-resilient measures. This makes dealing with climate change today more expensive, as buildings and infrastructure need retrofitting or refurbishing, and new clean energy systems must be built.
The authors identify three main types of climateflation: fossilflation (rising costs due to fossil fuel dependence), carbonflation (increased costs associated with carbon taxes and low-carbon incentives), and greenflation (higher costs for climate-friendly equipment and insurance). While some climate change-related factors, like higher CO2 levels boosting crop yields, can lead to cost reductions, the net effect is expected to be increasing costs in the foreseeable future.
The authors warn that rising costs could exacerbate social inequality, political radicalization, and geopolitical instability. They also highlight the potential for climateflation to fuel reactionary and xenophobic political movements, further destabilizing society. The article concludes by emphasizing that addressing climateflation requires transitioning to a fossil fuel-free global economy, reducing emissions to net zero, and building climate-resilient infrastructure.
Written by urgent.news from Phys.org's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
