Rising Temperatures and Inflation

June 23, 2024 / activist360

Vegetables in a market. Credit: Photo by nrd on Unsplash.

Economic Implications of Climate Change

As global temperatures climb, economists and policymakers are increasingly concerned about the secondary effects on economic stability. A recent study published in Nature sheds light on how rising temperatures are likely to boost inflation levels, affecting economies worldwide. Here’s what you need to know about the correlation between global warming and inflation, based on the latest research.

Key Findings: Temperature Increases and Inflation

The study utilizes a vast dataset encompassing over 27,000 observations of monthly consumer price indices from around the world. The findings are clear: higher temperatures are associated with significant increases in both food prices and overall inflation. This relationship persists over a 12-month period following temperature increases, suggesting long-term economic impacts.

Potential Impact on Electricity Prices

The study also highlights how rising temperatures could impact electricity prices. While the data on electricity specifically is not as robust as for overall inflation, the implications are significant given the increased demand for cooling during hotter periods. This heightened demand can strain supply and elevate electricity prices, further complicating the economic challenges posed by climate change.

Impact on Labor Productivity and Agricultural Yields

Higher temperatures are linked to reduced labor productivity, particularly in outdoor and non-air-conditioned environments, and lower crop yields. These factors contribute to the inflationary pressures observed in the study. Reduced productivity and agricultural output exacerbate economic stress during heatwaves, making communities more vulnerable to price increases.

Regional Impact Variations

The inflationary impact of rising temperatures is not uniform across all geographies. In regions with higher latitudes, inflation spikes during the hottest months of the year. In contrast, at lower latitudes, where temperatures are generally warmer, inflationary pressures are more consistent throughout the year.

Future Projections and Economic Forecasting

Looking ahead to 2035, the study projects substantial increases in inflation due to expected temperature rises. Under various climate models and emissions scenarios, global average food inflation could increase by 0.92 to 3.23 percentage points per year, while headline inflation could rise by 0.32 to 1.18 percentage points per year. These projections highlight the urgency for adaptive measures in monetary policies and economic planning.

The cumulative marginal effect of temperature shocks on food and headline inflation. From Kotz, M., Kuik, F., Lis, E., & Nickel, C. (2024). Global warming and heat extremes to enhance inflationary pressures. Communications Earth & Environment, 5(116). (a) A schematic outline of the mechanisms via which temperature shocks may impact inflation via agricultural productivity and food prices. The results of fixed-effects panel regressions from over 27,000 observations of monthly price indices and weather fluctuations worldwide over the period 1996-2021 demonstrate persistent impacts on food (b) and headline (c) prices from a one-off increase in monthly average temperature. Lines indicate the cumulative marginal effects of a one-off 1 C increase in monthly temperature on month-on-month inflation rates, evaluated at different baseline temperatures (colour) reflecting the non-linearity of the response by baseline temperatures which differ across both seasons and regions (see methods for a specific explanation of the estimation of these marginal effects from the regression models). Error bars show the 95% confidence intervals having clustered standard errors by country. Full regression results are shown in Tables S2 & S3. Icons are obtained from Flaticon using work from Febrian Hidayat, Vectors Tank and Freepik.

Implications for Monetary Policy

The direct correlation between temperature increases and inflation has significant implications for central banks and monetary policymakers. Traditional monetary policy may need to evolve to address the challenges posed by climate-induced inflation, especially as these effects become more pronounced.

The Necessity for Socioeconomic Adaptation

The study underscores a critical gap in socioeconomic adaptation to rising temperatures. Historical data suggests limited adaptation through economic development, pointing to the need for unprecedented changes in future strategies. To mitigate inflationary pressures, enhanced agricultural resilience and economic adjustments are essential.

Summing Up

This research provides a crucial understanding of how climate change directly affects economic fundamentals such as inflation. It underscores the necessity for policymakers, particularly in economic and financial sectors, to consider the broader impacts of climate change—not just environmental but also economic. As the planet warms, the intertwined fates of our climate and economies become increasingly hard to ignore, demanding integrated approaches to climate policy and economic management.

Source: Kotz, M., Kuik, F., Lis, E., & Nickel, C. (2024). Global warming and heat extremes to enhance inflationary pressures. Communications Earth & Environment, 5(116). https://doi.org/10.1038/s43247-023-01173-x

Earth Day, A Call to Action for Our Planet

April 21, 2024 / activist360

Blue Marble 2000. Credit: NASA, Image created by Reto Stockli with the help of Alan Nelson, under the leadership of Fritz Hasler. CC 2.0.

Earth Day, observed on April 22, is a global movement focused on protecting our planet. This year, as the collective acknowledgment of environmental degradation’s profound impact, we are also presented with an opportunity to champion a cause that could significantly alter the course of our environmental future—the Global Plastics Treaty.

Origins & Significance of Earth Day

Earth Day first emer ged in 1970, initiated by Senator Gaylord Nelson after witnessing the catastrophic effects of an oil spill in Santa Barbara. The first Earth Day mobilized 20 million Americans and led to the creation of significant environmental policies and the Environmental Protection Agency (EPA). Today, Earth Day engages millions of people worldwide in activities aimed at preserving our planet, underscoring the power of collective action in tackling global challenges.

Why Earth Day Matters

Earth Day is crucial for several reasons:

Environmental Education: It raises awareness about pressing environmental issues and promotes sustainable practices.
Global Solidarity: Earth Day unites people across the globe, emphasizing that environmental stewardship is a shared responsibility.
Action and Advocacy: The day inspires individuals and organizations to engage in activities that protect the environment, from local clean-ups to global initiatives.

Earth Day 2024: End Plastic Pollution

The theme for Earth Day 2024 is the urgent need to combat plastic pollution. Plastics, particularly single-use plastics, are a severe threat to the environment, filling our oceans, killing wildlife, and disrupting ecosystems. The focus is on reducing plastic production by 60% by 2040 and eliminating single-use plastics by 2030.

The Urgent Call for the Global Plastics Treaty

In conjunction with Earth Day’s efforts, there is a significant push for the Global Plastics Treaty, a comprehensive international agreement aimed at tackling plastic pollution globally. With over 14,905 signatures, this petition calls on the United Nations and government organizations to adopt stringent measures against plastic pollution, including:

Reducing fossil fuel-based plastic production by 60% by 2040.
Holding producers accountable for environmental and health-related damages.
Banning plastic waste exports and incineration.
Promoting innovation in alternatives to plastic.

If we do not change our current habits, we will see a rise in hormonal diseases, cancers, and cardiovascular damage linked to the production and consumption of plastics. However, this bleak future is not inevitable; we have the ability to redirect our path and avoid this looming crisis.

How You Can Help

This Earth Day, let your actions speak louder than words:

Sign the Global Plastics Treaty Petition: Join the global movement to push for a binding international agreement that addresses plastic pollution head-on.
Reduce, Reuse, Recycle: Make personal changes to minimize your plastic usage.
Participate in Community Actions: Engage in local Earth Day events that focus on cleaning up and reducing plastics and help spread the word.

Final Thoughts

Celebrating Earth Day means committing to protect our planet continuously. By supporting initiatives like the Global Plastics Treaty, we can take significant steps towards a sustainable future free from plastic pollution. This Earth Day, let’s not just celebrate our planet; let’s take concrete steps to save it. Together, we can make a difference, but only if we act now. Join the movement, sign the treaty, and be part of the solution. We have the power to change our environmental destiny and ensure a healthier planet for future generations.

Our goal is not just an environment of clean air and water and scenic beauty. The objective is an environment of decency, quality and mutual respect for all other human beings and all living creatures.
—Gaylord Nelson

UN goal of ending hunger by 2030 risks failure as global food crisis worsens

July 16, 2023 / activist360

*The ‘three sisters’ are staple foods for many Native American tribes. Marilyn Angel Wynn/Getty Images*

Pandemic and war in Ukraine have pushed 122 million more people into hunger since 2019, according to new report.

By David Henry, Forests News

The number of people facing hunger in the world has risen by more than 122 million since 2019 as a result of the coronavirus pandemic, the war in Ukraine and weather shocks, according to a new United Nations report.

It is estimated that 691 million to 783 million people lacked sufficient food in 2022, affecting 9.2% of the global population compared with 7.9% in 2019, the year before the pandemic began, according to the State of Food Security and Nutrition in the World (SOFI) 2023 report, which is produced by five UN agencies.

The Food and Agriculture Organization of the United Nations (FAO), the International Fund for Agricultural Development (IFAD), the United Nations Children’s Fund (UNICEF), the World Health Organization (WHO) and the World Food Programme (WFP) provide an annual update on the world’s progress towards ending hunger, achieving food security and improving nutrition.

The 2023 report emphasized that the UN Sustainable Development Goal of creating a world free of hunger by 2030 risks failure if current trends continue. It is projected that almost 600 million people will be chronically undernourished at the end of the decade.

“The latest SOFI report highlights the urgent need to reverse the trends that undermine the world’s ability to achieve the goal of zero hunger by 2030,” says Éliane Ubalijoro, Chief Executive Officer of the Center for International Forestry Research and World Agroforestry (CIFOR-ICRAF). “Trees, forests and agroforestry landscapes have a vital role to play in this process by helping address the interrelated challenges of biodiversity loss, climate change, food security, livelihoods and inequity.”

To help transform food systems, CIFOR-ICRAF is promoting the wide-scale adoption of agroecological approaches, including farmer-led strategies to increase tree cover and diversity across agricultural landscapes. And by providing evidence on how forests and trees contribute to people’s diets, it is raising awareness and influencing national policies to include forests and trees as part of national and local food systems.

‘’The SOFI 2023 report shows that in a world where regular crises become the new norm, increasing the resilience of agrifood systems is a priority,” says David Laborde, Director of the FAO Agrifood Economics Division (ESA). “Forestry has a key role to play in this system. The range of actions and opportunities is vast: from helping the regulation of water flows and mitigating the severity of heatwaves, to providing income diversification options and more robust integrated production systems.’’

While global hunger stabilized in 2022 alone, it continued to increase in some vulnerable countries, in particular in Africa. Seizing the opportunity provided by forests, either by rebuilding them in the Sahel region, or preserving their services in Central and Eastern Africa is part of reversing the hunger trend in these countries, Laborde says.

As it addresses five global challenges, CIFOR-ICRAF is committed to transforming food systems that are based on sustainable land management, equitable outcomes for Indigenous Peoples and local communities, as well as supply chains that rely on sound environmental practices and social inclusion.

Trees can make a major contribution to boosting the productivity of farming systems and the lives of rural communities, who provide most of the world’s food. CIFOR-ICRAF facilitates this process by helping farmers choose the right tree for the right place for the right purpose on their farms and then to manage them effectively.

“Agroecology enables farmers to grow food while preserving soil health and improving the resilience of food systems,” says Fergus Sinclair, Chief Scientist at CIFOR-ICRAF. “The world produces enough food to feed nearly twice the current population, yet millions of people are still hungry. A greater emphasis on agroecology, including reducing food loss and waste, would help policymakers tackle this worsening global food crisis.”

The 2023 SOFI report highlighted that agroecology has a role to play in ending hunger by the end of the decade while offering other benefits. At plot, farm and landscape scales, it can help increase farmers’ incomes, improve food security and nutrition, use water more efficiently and enhance nutrient recycling, as well as conserve biodiversity and provide other ecosystem services.

Agrifood systems will also need to be viewed beyond the traditional rural-urban divide, according to the UN agencies. Due to population growth, small and intermediate cities and rural towns are increasingly bridging the space between rural areas and large metropolises, creating both challenges and opportunities to ensure everyone has access to affordable healthy diets.