DP19643 Greenflation: Empirical Evidence using Macro, Regional and Sectoral Data

A research study examines the impact of climate change policies on inflation across 177 economies, 78 subnational areas, and 17 sectors from 1989-2022. The study finds that carbon taxes increase inflation by 0.7-4%, while emissions trading systems and other climate policies like R&D subsidies show no significant price effects.