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Uncertain weather forecasts are raising grocery costs
Predictions of extreme weather events are increasingly affecting food prices, driving up costs even before actual climate shocks occur.
In short:
- Weather forecasts can prompt food manufacturers to raise prices in anticipation of supply chain disruptions.
- Increased costs in production and transportation due to extreme weather are often passed on to consumers.
- The resilience of the food supply chain mitigates some impacts, but rising frequency of climate events threatens stability.
Key quote:
“When it comes to the climate risk on food prices, people typically look at the production side. But over the last two years, we learned that extreme weather can raise food prices, [cause] transportation disruptions, as well as production disruptions.”
— Seungki Lee, agricultural economist at Ohio State University
Why this matters:
As meteorologists warn of potential droughts, floods, or hurricanes, commodity traders react swiftly, often raising prices and premiums to mitigate perceived risks. These preemptive hikes ripple through the supply chain, ultimately reaching consumers who are already strained by rising costs.
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Climate change's impact on prices is more than just hot air
A study reveals the inflationary ripple effects of rising temperatures.
In short:
- A new analysis connects increasing temperatures due to climate change to rising food costs and inflation globally.
- The research projects significant annual increases in food prices and overall inflation rates over the next decades.
- The study by Max Kotz and the European Central Bank examines data from 121 nations, emphasizing the economic repercussions of climate change.
Key quote:
“This is really from my perspective another example of one of the ways in which climate change can undermine human welfare, economic welfare.”
— Max Kotz, Potsdam Institute for Climate Impact Research
Why this matters:
Unpredictable weather patterns such as droughts and floods can devastate crops, reducing supply and causing prices to spike. For many households, especially those in lower-income brackets, food represents a substantial portion of monthly expenses, making any increase in food prices a significant inflationary pressure.
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www.washingtonpost.com
COOP DK in Denmark is telling customers about the climate impact of their grocery choices
A major supermarket chain in Denmark is offering shoppers something extra at checkout: an estimated amount of the carbon dioxide released into the atmosphere from their groceries.
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