March 23: Global warming and heatwaves are expected to further increase food prices and overall inflation across the world in future, according to new research from scientists and the European Central Bank.

The impact will vary but be felt everywhere, especially in developing nations, said the paper published in the journal Communications Earth and Environment on Thursday. Extreme weather -- including heatwaves, droughts and floods -- is becoming increasingly frequent as the climate heats up, taking a toll on key sectors of the economy, including farming and food production.

For this new study, researchers from the Potsdam Institute for Climate Impact Research (PIK) and the European Central Bank drew on historical price and weather data from 121 countries between 1996 and 2021. They found that rising temperatures due to climate change were predicted to drive up the cost of food worldwide between 1.49 and 1.79 percentage points every year by 2035.

The effect of future warming and heat extremes on overall inflation would be between 0.76 and 0.91 percentage points under a best and worst case scenario.

"We find this strong evidence that higher temperatures, particularly in the summer, or in places that are hot, cause price increases mainly in food inflation but also in overall inflation," Maximilian Kotz, one of the report's authors from PIK, told AFP.

Kotz said the impact on food prices and inflation from future warming would be most felt in "regions that are already hotter" especially poorer and developing parts of the world.

Amplified extremes

Africa and South America would be the continents most affected, the study found. But the northern hemisphere would not be spared higher prices as a result of climate extremes, Kotz said.

"In those places in the northern hemisphere -- mainly in the summer -- that's where those things will mainly happen. Whereas in the rest of the world, it will be more spread out across the year," he said. They did not, however, find that global warming had a significant impact on other household costs, except electricity prices. This was "fairly consistent" with other studies that demonstrated the particular sensitivity of agriculture to climate shocks, Kotz said.

This research also found that a major heatwave across Europe in the summer of 2022 probably caused food inflation to rise by 0.67 percentage points, with a greater impact in southern Europe. "Future climate change will amplify the magnitude of such heat extremes, thereby also amplifying their potential impact on inflation," the report stated.