ECB / Potsdam: “Global Warming will Drive Up Food Inflation, Unless Farmers Adapt”
In my opinion, citing 2022 in Europe as an example of climate disruption caused food inflation is absurd. The problems being experienced by Europe are because of EU incompetence, not climate change.
ECB / Potsdam: Global Warming will Drive Up Food Inflation, Unless Farmers Adapt
Essay by Eric Worrall
“… in a low emission-scenario most impacts could be removed by adjustment once global temperatures stabilise …”
Global warming and heat extremes to enhance inflationary pressures
Maximilian Kotz, Friderike Kuik, Eliza Lis & Christiane Nickel
Abstract
Climate impacts on economic productivity indicate that climate change may threaten price stability. Here we apply fixed-effects regressions to over 27,000 observations of monthly consumer price indices worldwide to quantify the impacts of climate conditions on inflation. Higher temperatures increase food and headline inflation persistently over 12 months in both higher- and lower-income countries. Effects vary across seasons and regions depending on climatic norms, with further impacts from daily temperature variability and extreme precipitation. Evaluating these results under temperature increases projected for 2035 implies upwards pressures on food and headline inflation of 0.92-3.23 and 0.32-1.18 percentage-points per-year respectively on average globally (uncertainty range across emission scenarios, climate models and empirical specifications). Pressures are largest at low latitudes and show strong seasonality at high latitudes, peaking in summer. Finally, the 2022 extreme summer heat increased food inflation in Europe by 0.43-0.93 percentage-points which warming projected for 2035 would amplify by 30-50%.
Read more: https://www.nature.com/articles/s43247-023-01173-x
But farmers will apparently be able to adapt to these upheavals, “once temperatures stabilise”;
… Although the empirical evidence indicates that adaptation to temperature shocks has been limited historically, we explore the potential of adaptation via adjustment to changing temperatures to reduce these future impacts. We do so by using empirical models in which temperature shocks are defined relative to a 30-year moving average rather than a constant baseline (Fig. S6k–t), and by evaluating potential impacts using future temperatures defined in this way. This method indicates that adaptation via adjustment could substantially reduce future impacts (Supplementary Fig. S14). In particular, in a low emission-scenario most impacts could be removed by adjustment once global temperatures stabilise(Supplementary Fig. S14c, d). However, in scenarios of un-mitigated warming, persistent impacts of considerable size remain despite introducing adjustment of this type which has not been observed historically (Supplementary Fig. S14). …
Read more: same link as above
The study authors also admit renewables may be increasing sensitivity to adverse weather.
… Second, our empirical results refer predominantly to food and headline inflation, whereas we find a limited response of other price aggregates to weather changes. However, the strong response of electricity demand to temperature5,6 suggests that impacts on electricity prices are plausible. Indeed, we find that electricity prices show some consistent and persistent response to temperature increases (Supplementary Fig. S1k), but with much larger uncertainty which precludes statements of significance at conventional levels. Lesser data availability for this more detailed price aggregate as well as complex and heterogeneous electricity price-setting practices may contribute to these large errors. However, as electricity supply is increasingly met with renewable sources, the price sensitivity to weather may change. A detailed analysis of electricity and other price aggregates may be a fruitful avenue of future work. …
Read more: same link as above
Naturally the study makes heavy use of RCP 8.5.
In my opinion, citing 2022 in Europe as an example of climate disruption caused food inflation is absurd. The problems being experienced by Europe are because of EU incompetence, not climate change.
Food inflation in Europe is a problem, because European farmers are under attack by radical greens. Ongoing demands farmers restrict use of fertiliser and chemicals, and insane attempts to cut the number of farmers, by coercing farmers to sign agreements to never farm again, are probably not encouraging farmers to invest in upgrading their land. Dutch police shot live ammo at farmers protesting climate rules in 2022.
In 2022, in response to fertiliser shortages triggered by the war in Ukraine, there were crazy policy responses to the looming food shortages. The Scottish Agriculture Minister refused to release more land for agriculture to help farmers maintain food supply. “We are still in a nature emergency that hasn’t gone away… so it’s a no“
Europe experienced fertiliser shortages in 2022, because of their reliance on Ukraine and Russia.Ukraine and Russia are (were?) major suppliers of fertiliser, because they have lots of cheap energy. Producing fertiliser is energy intensive.
Europe’s disastrous green energy policies have made it uneconomical to produce fertiliser in Europe, which made Europe vulnerable to the supply shock caused by the Ukraine war.
In addition the EU operates a strict tariff regime, The European Common Agricultural Policy, which taxes imports of food, and restricts Europe’s ability to combat weather shocks by importing more food from outside the EU.
I’m not disputing that in 2022 Europe suffered adverse weather conditions, but there were confounding factors. If Europe hadn’t made such a mess of their agriculture, climate and energy policies, there would have been a lot less food inflation.
As for adaption, why would a regime of continuous warming be so different to stabilisation at a higher temperature?
Are the researchers suggesting farmers are too dumb to pick up the phone? Why would persistent impacts remain in scenarios of unmitigated warming? Can’t farmers talk to their friends down South, to discover what crops and techniques work in warmer climates?
Farmers all over the world adapt the same crops to radically different temperatures. Subtropical Bundaberg can grow Maine potatoes at 25 degrees South of the Equator, a few hours drive from the 23.4 degree tropic of Capricorn, the boundary of the Southern tropics, because they plant the potatoes in Fall, then harvest them in Spring before the Summer heat kills them.
If temperature rose significantly every year, farmers would adapt by borrowing last year’s planting practices from their friends 50-100 miles South, or switch to new crops.
The Potsdam researchers are wrong about farmers not adapting to a warmer climate. Canadian Geographic admitted in 2020 that global warming is opening millions of square kilometres of new agricultural land. This is a continuation of the process which begun with the end of the Little Ice Age in 1850. Farmers will move into these lands the moment they become viable, unless agriculture hating politicians prevent them from doing so. Similar land openings would occur in Greenland and far Northern Europe, were global warming to continue.
As for drought and flood, there is no evidence extreme weather is getting worse. Upgraded water infrastructure could capture and store floodwater, and transport water to where it was needed. If Western governments spent a fraction of the cash they squander on useless renewables, on building infrastructure which is actually needed, floods and droughts would be much less of a problem.