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Is inflation due to climate change?

Inflation reached 8.6 % in June 2022 for the eurozone. The following month, this rate increased to 8.9%. Certainly, Jerome Powell, the chairman of the Federal Reserve, has promised to work to control inflation. But, the situation remains very worrying. And Christine Lagarde recently made a surprising statement on the subject, to say the least.


Climate disasters would affect “price stability”

Under tweet from Bitcoin News on August 28, “ Christine Lagarde stressed that it must be taken into account that climate disasters greatly affect price stability ». Indeed, the current president of the European Central Bank (ECB) made this statement during an interview with Madame Figaro. On August 15, the New York Times had also established a link between inflation and climate change.

Indeed, the magazine had indicated how politicians could fighting rising prices by fighting climate change. The Biden administration apparently follows the same logic with its recent bill (Inflation Reduction Act). This project aims to reduce inflation by fighting climate change.

That said, a member of the ECB’s board of Directors, Isabel Schnabel, recently made a statement on inflation. According to the latter, central banks are finding it more difficult to control price pressure because of the globalization of inflation. She claimed that “ central banks are likely to face a higher sacrifice ratio than in the 1980s ».

According to Christine Lagarde: “ If more and more climate disasters, droughts and famines occur around the world, there will be repercussions on prices, on insurance premiums and on the financial sector. ». And according to François Villeroy de Galhau (governor of the Banque de France) and Isabel, inflation could be curbed in Europe. But, this is going to require a significant “sacrifice”.

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Luc Jose Adjinacou avatar
Luke Jose Adjinacou

Far from having cooled my ardor, an unsuccessful investment in 2017 on a cryptocurrency only increased my enthusiasm. I therefore resolved to study and understand the blockchain and its many uses and to relay information related to this ecosystem with my pen.

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