The effect of extreme weather events on unprocessed food inflation in Slovenia

english

2024

1 spletni vir (1 datoteka PDF (12 str.))

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Extreme weather events are becoming more intense and frequent due to climate change and nature degradation, both consequences of human activity.The relevance of this study is based on the fact that extreme weather shocks are be-coming more intense and frequent as the consequences of climate change continue to unfold. The impact of extreme weather events on the economy is becoming more pronounced as human activity continues to contribute to nature degradation, result-ing in nature’s diminished ability to curb their adverse effects. Climate risks can have an impact on the economy through direct or indirect channels. The 2021 strategy review of the ECB compelled policymakers to recognise the grow-ing impact of climate change and climate policy on the economy, and to therefore consider these effects in their projection analyses. Climate risks are twofold, physi-cal and transition. The latter concern indirect risks stemming from changes in climate policy, behavioural changes of economic agents and green technology innovations, while the former pertain to environmental events affecting the economy directly.The increasing frequency and magnitude of extreme weather events are increasingly affecting agricultural production and food prices, which indicates the importance of their inclusion in inflation projections.

14.06.2024