In the News Teaching Activity – how climate change is affecting food price inflation (Dec 2024)

Extreme weather events are putting upward pressure on food inflation, with coffee prices hitting near-record highs.

Climate change is disrupting global food production, with rising temperatures and extreme weather events, like the floods in Spain, threatening key crops such as coffee, oranges, and olive oil. Economists warn that these shocks contribute to systemic food inflation and increased volatility, particularly in developing countries, where they risk exacerbating hunger. Research suggests climate pressures could add up to 3.2 percentage points to global food inflation in the next decade, prompting calls for urgent policy action. Building resilience through flood defences, crop innovation, and emergency food reserves is essential, but costly, long-term solutions clash with short-term political and economic priorities.

Wake up and smell the coffee: rising food prices show destabilising impact of climate crisis | Heather Stewart | The Guardian

1. Using a demand and supply diagram, explain how the recent severe flooding in Valencia in Spain may affect orange prices.

2. Using examples the article, identify the negative externalities that climate change is causing in the market for food production.

3. Why are climate-related price increases more problematic for developing countries than developed ones and are there any policies that could help reduce climate-induced inflation?