Bundesbank warns climate change may raise prices

The Deutsche Bundesbank has warned in an interview that climate change can raise prices, hurt growth, and create financial-stability risks.

• Mauderer said the Bundesbank uses climate scenarios to assess effects on inflation, GDP, and financial stability, including a favourable “Highway to Paris” case and a worst-case scenario with up to 4.8% lower EU GDP and 0.6 percentage point higher inflation.
• She said the central-bank network began in 2017 with France, the UK, Mexico, the Netherlands, Sweden, Singapore, China, and Germany and now has members from 95 countries; she also cited Pakistan’s 17 percentage point inflation rise in 2022 after floods and the €30 billion German Ahr Valley fund.