According to one expert, the effects of human-driven pollution are likely to cause an increase in inflation, Reuters reports.
What is happening?
Catherine Mann, an economist currently serving as a member of the Monetary Policy Committee of the Bank of England (and a former George H.W. Bush appointee and an executive at Citigroup), warned of increased inflation recently during a speech at Oxford University.
"The research here points to increased inflation, increased inflation persistence, and increased inflation volatility associated with climate shocks, policies, and spillovers," Mann said.
While all the economics terminology may be a bit difficult to decipher for the layperson, the gist of it is this: Things are about to get even more expensive, due to human-caused pollution.
This idea has also been put forward by the European Central Bank, which released a report with similar findings. The report noted that the largest impacts will likely be felt in the Global South, particularly Africa and South America.
Why is this concerning?
Much of the Bank of England's work on this subject has focused on the effects that pollution is having on insurers, according to Reuters. Already, we have seen insurance rates skyrocket in response to worsening and more frequent extreme weather events, caused by changing weather patterns that have been affected by human activity.
Companies like Allstate and Nationwide have been pulling out of areas that are especially susceptible to wildfires, hurricanes, and floods, leaving tens of millions of people who need insurance the most uninsured.
In other places, the companies are raising premiums to untenable levels. "I've never seen the market turn this quickly or significantly," said one expert.
What is being done about it?
Mann did not seem to offer any solutions in her remarks — just a warning. "Not only is it within my remit to respond to the macroeconomic effects of climate change, but my remit requires me to do so," she said.
What is perfectly clear is that the impacts of human-caused pollution on the environment are bad for everyone.
To prevent worsening extreme weather events and the overheating of our planet, we must take major steps, such as switching from dirty energy sources like oil and gas to clean, renewable energy sources like wind and solar.
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