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Climate change is known to have a major impact on the economy. Frost deteriorates the food supply, floods disrupt supply chains and heatwaves reduce productivity in the workplace. But that influence is disproportionately distributed across countries, according to ECB researchers. For example, a heat wave in Germany has a limited impact on inflation, while in Italy or Spain the increase in average temperature has a large effect and persists for months.
According to the Spanish meteorological agency AEMET, the extreme heat wave in Spain last year caused a significant drop in olive oil production. Less than 700,000 tonnes will have been produced in 2022, compared to 1.5 million tonnes in 2021. At the same time, in Spain, as in other EU countries, the price of food has soared.
Dry rivers
According to researchers, extreme temperature fluctuations will largely determine the inflation rate by 2035, according to the study reported by the Spanish newspaper Cinco Días. Food prices will rise further as production falls and food supplies deteriorate due to disruptions in supply chains. For example, water transport is further complicated by dried up rivers.
The ECB is also concerned about the impact of climate change on tourism, an important part of the Spanish economy. According to the Intergovernmental Panel on Climate Change (IPCC), extreme heat waves will become much more common.
forest fires
Spain was hit by forest fires early in the season this year. Since last week, a fire has raged in Castellón and Teruel, north of Valencia. According to local media, 4,000 hectares have been burned. Although the fire appears to be under control, the heat and wind remain a threat. High temperatures are also expected for the next few days.
Last year, hundreds of forest fires burned an area of 3,000 square kilometers. This is an area the size of the province of South Holland.