The recent heatwave in the UK serves as a stark reminder that the climate crisis is already disrupting daily life. While the global south bears the brunt of extreme weather, wealthier nations are not immune to its economic and social impacts. For instance, chocolate prices in the UK surged by 18% last month due to poor cocoa harvests in West Africa. In the US, $1 trillion was spent last year on recovery from climate disasters like wildfires and floods. Such events divert resources from other priorities, creating economic strain. Additionally, research shows that wildfire smoke reduces US workers’ earnings by up to 2%, disproportionately affecting older employees. These trends highlight the need for adaptive economic policies. Experts suggest measures like building buffer stocks of essential goods and revising inflation targets to address climate-driven cost shocks. Central banks, however, face challenges as traditional tools like interest rate hikes may not effectively tackle these issues. As the climate crisis worsens, policymakers must rethink strategies to ensure economic stability.
— new from The Guardian
