Climate-induced inflation

A term that emerged after 2000 to refer to the fact that – climate warming (overall warming) is occurring worldwide as a result of the growing emission of carbon dioxide (carbon emissions), as a result of which – crop yields are decreasing, especially in the case of cereals; because these plants grow faster with increasing temperature and bear less fruit (speed through their development, producing less grain in the process), – especially cultivated plants no longer achieve the best possible supply of moisture for their growth with an increase in external heat, also – with the increase in temperature (in some plants even disproportionately) a loss of moisture (increased transpiration) occurs; this is referred to as evapotranspiration (evapotranspiration: transporting moisture from the soil to the atmosphere), while – at the same time, the global increase in temperature leads to heavy rainfall accompanied by storms (rainstorms, cloudbursts) and to hurricanes, which cannot compensate for progressive evapotranspiration and are even detrimental to most food crops, which is why – according to World Bank estimates, agricultural productivity: output per hectare) will fall by 16 percent without the use of fertilizers, and by a further 3 percent under the condition of increased use of chemical fertilizers (artificial fertilizers), combined with increased cultivation of crops that are more drought-resistant, which – in view of the resulting decline in supply on the one hand and a growing world population (experts estimate a threefold increase in demand for crops between 2008 and 2080) on the other – will lead to a sharp rise in food prices and thus – correspondingly reduce purchasing power worldwide. – Closer investigations of the World Bank assume that after these projections (long-ranging projections) the USA, Canada and Germany could possibly profit from the development. These countries – located in whole (Germany) or in part (USA, Canada) in a relatively favorable latitudinal location – are pioneering universities and research institutes worldwide in the field of phytology (botany), and here again especially in the field of plant cultivation (the production of new varieties of plants through cross-breeding and genetic mutations with the aim of making the plants more productive or adapting them to changed environmental conditions). have extensive knowledge and experience in agrarian chemistry, especially with regard to specific plantadequate artificial fertilizers and pesticides, and – are also leaders in engineering as well as machine-building. Rising world market prices will therefore stimulate investment in agriculture in these countries (agrarian investment) and, as a result, increased agricultural production, which will at least offset (also there) climate-related crop losses. – For the EU as a whole, these conditions, which are favorable for Germany, could compensate for the fact that Spain, Portugal, Italy and Greece are expected to suffer crop yield losses of up to 30 percent as a result of climate change. – See biofuels, energy-inflation link, oil-food link, inflation compensation, purchasing power outflow, core inflation, carbon dioxide inflation, wage-price spiral, oil price, protein inflation, commodity prices, shocks, structural, second-round effects. – Cf. ECB Monthly Bulletin, June 2008, pp. 10 ff (current situation; outlook).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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