The Climate-Changing Context of Inflation: Fossilflation, Climateflation, and the Environmental Politics of Green Central Banks

Abstract

In this forum, I seek to demonstrate how the growing confluence of climate change and inflation offers a fruitful research agenda for environmental politics scholars. It develops two independent, yet interrelated, concepts first proposed by Schnabel: first, fossilflation, the legacy cost of the dependency on fossil energy sources, which has not been reduced forcefully enough over the past decades, and second, climateflation, the growing impact of natural disasters and severe weather events on economic activity and prices. With the subject of inflation often considered to be a contextual or descriptive feature of environmental issues, the economic implications of climate change have come to challenge the conventional understanding of the inflationary phenomenon. This article seeks to foster an interdisciplinary dialogue between scholars from different disciplinary backgrounds on the subject of climate change–induced inflation and the questions it presents for notions of “green” central banking.