VShe last two years, the return of war to Europe and the subsequent surge in inflation have been the main reasons for the historic decline in the ecological ambitions of the European Commission and the Member States. More than the anger of farmers, the fear of seeing the maintenance or strengthening of environmental standards increase inflationary tensions has undoubtedly played a major role in the deep and meticulous unraveling of the European Green Deal. It is easy to understand: any constraint on industry and agriculture, or, in general, on the carbon footprint of the productive system, induces adaptation and transformation costs, which can raise the ” Cost of life “.
This risk of inflation must be compared to another, much more distressing, source of rising prices: global warming. This is the meaning of a recent study published in Communications Earth & Environment and conducted by researchers from the Potsdam Institute for Research on the Effects of Climate Change (PIK) and two economists from the European Central Bank (ECB). The authors analyzed the fluctuations, recorded between 1996 and 2021, of 27,000 consumer prices in more than 120 countries and cross-referenced them with climate data. The links between prices and the manifestations of warming that they reveal indicate that environmental degradation is becoming an inflationary force that can no longer be neglected.
A kind of barter
Extrapolating their results to the coming decade, Maximilian Kotz (PIK, University of Potsdam) and his co-authors indicate that warming could cause consumer prices to rise by 0.3 to 1.2 percentage points annually at the level world by 2035. On the same horizon and with regard to foodstuffs, inflation could rise by 1 to 3.2 percentage points per year. This stronger impact on the food component of prices is consistent, the authors note, with the difficulty in maintaining the supply of agricultural raw materials in increasingly unfavorable weather conditions.
Without really realizing it, we would therefore have entered a period where inflationary pressures linked to environmental degradation are superimposed on the canonical causes of inflation (war and its profiteers, excess money supply in circulation, oil shocks, etc.). By sacrificing their ecological ambitions, European leaders are, in reality, operating a sort of barter. On the one hand, they protect themselves against inflation possibly linked to strong environmental policies, but this inflation is both constructed and agreed to, cyclical and reversible. On the other hand, they consent to the ecological crisis, and therefore to letting a rise in prices slip away that is both systemic and sustained, inertial and largely irreversible.
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