Research by scientists and the European Central Bank indicates that global warming and heat waves are poised to escalate food prices and overall inflation worldwide.

Published in the Journal Communications Earth and Environment on Thursday, the paper suggests that the impact will vary but will be ubiquitous, particularly affecting developing nations.

As the climate warms, extreme weather events such as heatwaves, droughts, and floods become increasingly common, and essential sectors like agriculture and food production are bearing the brunt.

For this latest study, researchers from the Potsdam Institute for Climate Impact Research and the European Central Bank analyzed historical price and weather data from 121 countries from 1996 to 2021.

Their findings suggest that rising temperatures due to climate change will drive global food prices by 1.49 to 1.79 percentage points annually by 2035.

Under various scenarios, the potential impact of future warming and heat extremes on overall inflation could range between 0.76 and 0.91 percentage points.

Maximilian Kotz, one of the report’s authors from PIK, emphasized, “We find strong evidence that higher temperatures, particularly in the summer or in hot regions, lead to price increases primarily in food inflation but also in overall inflation.”

Amplified extremes

The study revealed that Africa and South America could bear the brunt of these impacts. However, as Kotz explained, the northern hemisphere will also be affected by heightened costs due to climate extremes.

“These issues will predominantly arise in these northern hemisphere locations, particularly during the summer. Meanwhile, in other parts of the world, the effects will be more evenly distributed throughout the year,” he noted.

Nevertheless, the researchers did not find significant effects of global warming on other household expenses, except electricity prices.

“This finding is consistent with other studies highlighting agriculture’s particular sensitivity to climate shocks,” Kotz remarked.

Furthermore, the research highlighted that a significant heatwave in Europe during the summer of 2022 likely led to a 0.67 percentage point increase in food inflation, with southern Europe experiencing a more pronounced impact.

The report underscored, “Future climate change will exacerbate the severity of such heat extremes, thereby also magnifying their potential impact on inflation.”