Climate Change Is One Of The Biggest Contributors To Inflation And Economic Failures

In a new book from a former White House director of Environmental Entrepreneurs, Bob Keefe explains how the climate crisis is driving inflation and fundamentally altering global economics.

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“Climatenomics” is a new book from Bob Keefe, a former White House reporter and director of Environmental Entrepreneurs. In the book, Keefe discusses how the climate crisis is changing international economies and driving prices up in almost all sectors of business. One of the biggest issues he discusses is how “supply chain disruptions” is now just a new term for blaming climate change. 

“I don’t think people have realized that climate change is an economic issue now because it’s always been seen as an environmental, health or social issue. The fact of the matter is climate change is battering our economy,” says Keefe. 

US treasury secretary, Janet Yellen, recently was cited discussing how inflation has hit a 40-year high of 8.6%. The White House released a statement regarding the connection between the economy and climate change: “Our hemisphere is facing the devastating impacts and costs of climate change.”

“Climate-related weather disasters cost the US economy more than $145 billion in 2021 – a nearly 50% increase from last year. Over the last five years, they have cost $750 billion. Since 1980, 323 weather and climate disasters have cost $1 billion or more, the total cost of these events exceeds $2.195 trillion.”

According to a report from the reinsurance firm Swiss Re, climate disasters could end up costing the US economy 10% of gross domestic product by 2050. Globally, according to Keefe, that figure would rise by 18%. A 2018 National Climate Assessment projected that the climate crisis will decrease worker productivity by $221 billion by 2090. 

Another study published in Environmental Research Letters in July last year, cited “long-term warming contributed $27 billion to the losses covered by the US crop insurance program from 1991 to 2017, or just over 19% of the total. In 2012, the single costliest year, rising temperatures contributed nearly half of losses valued at $18.6 billion.”

David Super, a law and economics professor at Georgetown University, argues that climate change is widely ignored as one of the biggest contributing factors to inflation in the US. “Its impact is broad and systemic, so there’s no one item in the Consumer Price Index that you can say reflects climate change. We can say that grain and gas-oil costs reflect the Ukraine war but you can’t do that with climate change because it affects so many things,” says Super.

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“Loss of timber and homes due to wildfires in the west might show up in housing construction costs, or the cost of retrofitting homes to guard against coastal erosion and flooding. Right there you have several things that are either increasing demand or undermining supply, and that’s just one small part of it.”

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The White House is responsible for assessing and identifying the contributing factors to the economy. However, opposing views over the legitimacy of the threat climate change has on humanity has been widely debated, and ignored, within the US government. 

“That has led to less eagerness to do estimations in areas where a lot of estimates would have to be made because there’s so little inclination to assume those estimates would be done in good faith. In the face of a well-funded climate denier industry, the estimates get turned into a sideshow,” explained Super. 

“Shifting the climate crisis from an environmental to an economic issue is at the heart of what Climatenomics presents. What’s required is an effort similar in scale to the shift from the industrial to the information age to renewable energy and with it, provisions to counter climate change’s increasing disruption. What we do know is that the economic cost of climate change, both from weather disasters and commodities costs, is taking an increasing toll on economies,” says Keefe.

According to Super, “seeing climate change as an environmental issue – which it is – but not as an economic issue, which it surely is as well, is now in the process of changing. The current round of inflation has widened people’s eyes to it.”

“Sure, the pandemic and war on Ukraine are part of it, but I think this is a teachable moment that will allow people to see just how pervasive climate change is in affecting the way we live. We have framed the climate concern in extremely narrow ways – never a good idea with a complex social phenomenon or with something as all-encompassing as this.”