COP29 FOOD PRICE INFLATION
CLIMATE CHANGE, POVERTY: A
As less food is being produced for a growing number of people understanding the reasons is crucial for developing effective policies and interventions By Angus Downie, OPEC Fund, Senior Economist
C limate change, food price inflation and poverty are intricately linked, forming a complex interplay that affects millions of lives in our partner countries. The impacts of climate change exacerbate food price inflation, which in turn deepens poverty, creating a vicious cycle that is difficult to break. Understanding this interplay is crucial for developing effective policies and interventions to mitigate their combined effects. Climate change Significant and lasting changes in global climate patterns, mainly caused by human activities such as the burning of fossil fuels, deforestation and industrial processes, are having major effects on agriculture. Rising temperatures, changes in rainfall and increased frequency of extreme weather events such as droughts, floods and storms directly affect crop yields. For instance, heat stress can reduce the productivity of staple crops like wheat, rice and maize, while unpredictable rainfall can lead to crop failures. In addition, changing climate conditions are leading to the spread of plant diseases and pests, which further threatens food production.
Food price inflation Food price inflation, which reflects an increase in food prices over time, is typically driven by various factors such as supply chain disruptions, increased production costs and shifts in demand. However, more recently, the disruption caused to agricultural production by climate change has become a major concern because food supply has decreased leading to higher food prices, thereby pushing up food price inflation. Climate change induced disruptions are all the more worrying because of population growth – less food is being produced for a growing number of people. Food supply disruptions when demand is increasing due to population growth is another strain on global food production systems that is leading to higher prices. In addition, climate change is increasing the cost of growing crops. For instance, higher temperatures require more extensive irrigation, which increases water use and energy costs. Furthermore, the need to control against an increase in diseases and pests requires more pesticides and labour time, all of which are also contributing to higher food prices.
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