The Effects of Climate Change on Food and Consumer Price Inflation in Türkiye: ARDL Bound Test Approach

Öz

Climate change, through increasing extreme weather events and gradual global warming, negatively impacts agricultural productivity, production capacity, and energy costs. This situation threatens price stability and poses significant risks for monetary policy. In the literature, these effects are often described by concepts such as "heatflation" and "climateflation," with their impacts on food prices and consumer inflation being frequently discussed in recent years. The aim of this study is to analyze the effects of climate change on food and consumer inflation in Türkiye for the period 1990-2021, using the ARDL bounds testing approach and Toda-Yamamoto causality tests. The findings reveal that climate change exerts long-term inflationary pressures on both food and consumer inflation. Additionally, a bidirectional causality relationship between climate change and food and consumer inflation has been identified. These results highlight the importance of central banks expanding their policy tools to address climate risks and manage the upward pressures on price stability caused by climate change.

Anahtar Kelimeler

• Climate Change
• Inflation
• ARDL

Türkiye’de İklim Değişikliğinin Gıda ve Tüketici Enflasyonu Üzerindeki Etkileri: ARDL Sınır Testi Yaklaşımı

Öz

İklim değişikliği, artan aşırı hava olayları ve kademeli küresel ısınma yoluyla tarımsal verimlilik, üretim kapasitesi ve enerji maliyetleri üzerinde olumsuz etkiler yaratmaktadır. Bu durum, fiyat istikrarını tehdit ederek para politikası açısından önemli riskler doğurmaktadır. Literatürde “ısıflasyon” ve “iklimflasyon” gibi kavramlarla ifade edilen bu etkilerin, özellikle gıda fiyatları ve tüketici enflasyonu üzerindeki yansımaları son yıllarda sıklıkla tartışılmaktadır. Bu çalışmanın amacı, Türkiye’de iklim değişikliğinin gıda ve tüketici enflasyonu üzerindeki etkilerini 1990-2021 dönemi için ARDL sınır testi yaklaşımı ve Toda-Yamamoto nedensellik testlerini kullanarak analiz etmektir. Bulgular, iklim değişikliğinin gıda ve tüketici enflasyonu üzerinde uzun dönemli enflasyonist baskılara yol açtığını göstermektedir. Ayrıca, iklim değişikliği ile gıda ve tüketici enflasyonu arasında çift yönlü nedensellik ilişkisinin mevcut olduğu tespit edilmiştir. Bu sonuçlar, merkez bankalarının politika araçlarını iklim değişikliği ile mücadeleye yönelik genişleterek, iklim risklerinin fiyat istikrarı üzerindeki yukarı yönlü baskısını yönetmesinin önemini ortaya koymaktadır.

Anahtar Kelimeler

• İklim Değişikliği
• Enflasyon
• ARDL

Kaynakça

1. Acaravcı, A., Erdoğan, S. ve Akalın, G. (2015). The Electricity Consumption, Real Income, Trade Openness and Foreign Direct Investment: The Empirical Evidence from Turkey. International Journal of Energy Economics and Policy, 5(4), 1050-1057.
2. Acevedo, S., Mrkaic, M., Novta, N., Pugacheva, E. ve Topalova, P. (2020). The Effects of Weather Shocks on Economic Activity: What are the Channels of Impact?. Journal of Macroeconomics, 65, 103207.
3. Andersson, M., Baccianti, C. ve Morgan, J. (2020). Climate Change and The Macro Economy. https://www.ecb.europa.eu/pub/pdf/scpops/ecb.op243~2ce3c7c4e1.en.pdf (Erişim: 16.08.2024).
4. Arndt, C., Loewald, C. ve Makrelov, K. (2020). Climate Change and its Implications for Central Banks in Emerging and Developing Economies. https://www.resbank.co.za/en/home/publications/publication-detail pages/working-papers/2020/10001 (Erişim: 19.08.2024).
5. Başkaya, Y. S., Gürgür, T. ve Öğünç, F. (2008). Küresel Isınma, Küreselleşme ve Gıda Krizi-Türkiye’de İşlenmiş Gıda Fiyatları Üzerine Ampirik Bir Çalışma. Central Bank Review, 1-32.
6. Batten, S. (2018). Climate Change and the Macro-Economy: A Critical Review. https://www.bankofengland.co.uk/working-paper/2018/climate-change-and-the-macro-economy-a-critical-review (Erişim: 10.08.2024).
7. Beirne, J., Dafermos, Y., Kriwoluzky, A., Renzhi, N., Volz, U. ve Wittich, J. (2021). The Effects of Natural Disasters on Price Stability in The Euro Area. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3975313 (Erişim: 21.07.2024).
8. Boneva, L., Ferrucci, G. ve Mongelli, F. P. (2021). To Be or Not to Be “Green”: How Can Monetary Policy React to Climate Change?. https://www.ecb.europa.eu/pub/pdf/scpops/ecb.op285~be7d631055.en.pdf (Erişim: 11.06.2024).

9. Carney, M. (2015). Breaking the Tragedy of the Horizon – Climate Change and Financial Stability. https://www.bankofengland.co.uk/-/media/boe/files/speech/2015/breaking-the-tragedy-of-the-horizon-climate-change-and-financial-stability.pdf (Erişim: 11.06.2024).
10. Chamdani, M. C. ve Santoso, B. S. (2023). The Central Bank’s Policy Justification in Mitigating Climate Change. Journal of Central Banking Law and Institution, 2(1), 93-122.
11. Ciccarelli, M., Kuik, F. ve Hernández, C. M. (2023). The Asymmetric Effects of Weather Shocks on Euro Area Inflation. https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp2798~0608a462fb.en.pdf (Erişim: 21.06.2024).
12. Cœuré, B. (2018). Monetary Policy and Climate Change. https://www.bis.org/review/r181109f.pdf (Erişim: 16.08.2024).
13. Drudi, F., Moench, E., Holthausen, C., Weber, P. F., Ferrucci, G., Setzer, R. ve Ouvrard, J. F. (2021). Climate Change and Monetary Policy in The Euro Area. https://www.ecb.europa.eu/pub/pdf/scpops/ecb.op271~36775d43c8.en.pdf (Erişim: 16.08.2024).
14. Erdoğan, S., Kartal, M. T. ve Pata, U. K. (2024). Does Climate Change Cause an Upsurge in Food Prices?. Foods, 13(1), 1-20.
15. Fisher, P. ve Alexander, K. (2019). Climate Change: The Role for Central Banks. https://www.kcl.ac.uk/business/assets/pdf/dafm-working-papers/2019-papers/climate-change-the-role-for-central-banks.pdf (Erişim: 18.08.2024).
16. Ichoku, H., Anthony, I., Olushola, T. ve Martins, A. (2023). Modelling Dynamic Linkage between Climate Change and Food Inflation in Nigeria. International Journal of Environment and Climate Change, 13(11), 1200-1217.
17. Iliyasu, J., Mamman, S. U. ve Ahmed, U. A. (2023). Impact of Climate Change On Output and Inflation in Africa’s Largest Economies. Climate and Development, 15(10), 864-875.
18. IPCC (2021). Climate Change 2021: The Physical Science Basis. https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR6_WGI_FullReport_small.pdf (Erişim: 12.08.2024).
19. Kishan, E. (2023). Impact of Climate Change on Inflation: An Empirical Evidence from India Based on Vector Error Correction Model. The Institute of Cost Accountants of Inda, 49(2-3), 85-98.
20. Kwiatkowski, D., Phillips, P. C., Schmidt, P., ve Shin, Y. (1992). Testing The Null Hypothesis of Stationarity Against The Alternative of a Unit Root: How Sure Are We That Economic Time Series Have a Unit Root?. Journal of Econometrics, 54(1-3), 159-178.
21. Lamichhane, S., Eğilmez, G., Gedik, R., Bhutta, M. K. S. ve Erenay, B. (2021). Benchmarking OECD Countries’ Sustainable Development Performance: A Goal-Specific Principal Component Analysis Approach. Journal of Cleaner Production, 287, 1-15.
22. Le, T. H., Chuc, A. T. ve Taghizadeh-Hesary, F. (2019). Financial Inclusion and Its Impact on Financial Efficiency and Sustainability: Empirical Evidence from Asia. Borsa Istanbul Review, 19(4), 310-322.
23. Mishkin, F. S. (2018). Makroekonomi: Politika ve Uygulama. Ankara: Nobel.
24. Mukherjee, K. ve Ouattara, B. (2021). Climate and Monetary Policy: Do Temperature Shocks Lead to Inflationary Pressures?. Climatic Change, 167(32), 1-21.
25. NGFS (2018). First Progress Report. https://www.ngfs.net/en/first-progress-report (Erişim: 16.08.2024).
26. NGFS (2019). A Call for Action: Climate Change as a Source of Financial Risk. https://www.ngfs.net/sites/default/files/medias/documents/ngfs_first_comprehensive_report_-_17042019_0.pdf (Erişim: 16.08.2024).
27. NGFS (2020). Climate Change and Monetary Policy Initial Takeaways. https://www.ngfs.net/en/climate-change-and-monetary-policy-initial-takeaways (Erişim: 16.08.2024).
28. Ochieng, J., Kirimi, L. ve Mathenge, M. (2016). Effects of Climate Variability and Change on Agricultural Production: The Case of Small-Scale Farmers in Kenya. NJAS-Wageningen Journal of Life Sciences, 77, 71–78.
29. Ouattara, B., Soutar, C. ve Waight, G. (2024). Climate Threat and Price Stability: A Case Study of Belize. Review of Development Economics, 1-51.
30. Parinet, B., Lhote, A. ve Legube, B. (2004). Principal Component Analysis: An Appropriate Tool for Water Quality Evaluation and Management-Application to A Tropical Lake System. Ecological Modelling, 178(3-4), 295-311.
31. Pesaran, M. H., Shin, Y. ve Smith, R. J. (2001). Bounds Testing Approaches to the Analysis of Level Relationships. Journal of Applied Econometrics, 16(3), 289-326.
32. Schnabel, I. (2022). A New Age of Energy Inflation: Climateflation, Fossilflation and Greenflation. https://www.bis.org/review/r220317b.htm (Erişim: 17.11.2023).
33. Stankovic, J.J, Jankovic-Milic, V., Marjanovic, I. ve Janjic, J. (2021). An Integrated Approach of PCA and PROMETHEE in Spatial Assessment of Circular Economy Indicators. Waste Management, 128, 154-166.
34. Toda, H. Y., ve Yamamoto, T. (1995). Statistical Inference in Vector Autoregressions with Possibly Integrated Processes. Journal of econometrics, 66(1-2), 225-250.
35. UN (2015). Paris Agreement. https://unfccc.int/sites/default/files/english_paris_agreement.pdf (Erişim: 16.08.2024).
36. Villeroy de Galhau, F. (2019). Climate Change: Central Banks Are Taking Action. https://publications.banque-france.fr/sites/default/files/media/2019/06/12/fsr_villeroy.pdf (Erişim: 16.08.2024).
37. Zouabi, O. ve Dimou, M. (2024). The Impact of Climate Change on Inflation in Tunisia: Evidence from The Asymmetric NARDL Model. https://link.springer.com/article/10.1007/s10018-024-00398-0 (Erişim: 14.05.2024).