How Much? Understanding the Skyrocketing Costs of Climate Change and Its Impact on Our Daily Lives

The True Cost of Climate Change: Olive Oil Price Inflation and the Rising Cost of Living

How much is a bottle of olive oil in your local supermarket? Olive oil, often hailed as "liquid gold," is a staple in kitchens worldwide. It symbolises culture, health, and culinary traditions from the Mediterranean basin to the far corners of the globe. This summer, this essential ingredient is at the centre of a crisis that reflects broader challenges: the devastating impact of climate change on our food supply and the corresponding rise in inflation. Despite the severity of this issue, it has not garnered the attention it deserves in the media.

This weekend's news is dominated by last week's market gyrations and the yen carry trade sell-off, marking a step change in the business cycle amid a monetary policy shift between the US and Japan. And yet, we ignore the slow-moving but consistent year-on-year impact of climate change on people's jobs, the global economy, resilience, and the cost of living. Why doesn't the world see this as a pressing concern worthy of front-page headlines? Read on to discover the hidden costs of climate change and how it's driving up the price of olive oil—and everything else.

The Soaring Price of Olive Oil: A Warning Sign of Deeper Issues

Over the past two years, the price of olive oil has skyrocketed. Two years ago, a two-litre bottle of supermarket olive oil cost about ￡7. Today, that same bottle will set you back more than ￡16. This dramatic increase, is not just a reflection of market dynamics but a direct consequence of the harsh realities of climate change.

Spain, the world's largest producer of olive oil, has been hit particularly hard. The country, which typically supplies nearly half of the world's olive oil, has experienced severe droughts and extreme heatwaves. These droughts and wildfires have decimated olive groves, reducing yields by more than 50% in some areas. Similar stories are occuring in Italy, Greece, and Turkey, where once bountiful olive harvests are shrinking, sending shockwaves through global supply chains.

The result? Olive oil is becoming a luxury item, unaffordable for many who once considered it a daily necessity. In Spain, supermarket bottles have even been fitted with security tags to tackle a surge in shoplifting by organised gangs. However, the issue extends far beyond the cost of this one product.

The Size, Scale, and Impact of the Olive Oil Industry in Europe

The olive oil industry is a cornerstone of the European agricultural sector. It involves over 4 million people, produces approximately 2.5 million metric tons of olive oil annually, and generates over €7 billion in value. Providing employment and sustenance to millions of families, particularly in rural areas where alternative employment opportunities may be limited. The industry's importance extends beyond just the production of olive oil; it encompasses a range of activities, including cultivation, harvesting, processing, and marketing.

As climate change continues to pose severe challenges, the sustainability and resilience of the olive oil industry are at risk. Reduced yields and increased costs threaten the livelihoods of those directly involved and have broader implications for food security and economic stability in the region.

The olive oil industry crisis underscores the urgent need for comprehensive climate action and adaptation strategies to protect this vital sector. By understanding the scale and impact of these challenges, we can better appreciate the necessity for robust policies and measures to mitigate the effects of climate change on agriculture and the broader economy.

Climate Change and Cost of Living

The connection between climate change and our cost of living is clear. As extreme weather events become more frequent and severe, they wreak havoc on agricultural production, leading to supply shortages and increased prices. Olive oil is just one example, but it's powerful, illustrating how a single ingredient can have ripple effects across economies.

When farmers face droughts, floods, or unseasonable weather, their yields suffer. This reduces the supply of food and drives up the cost of production. Water becomes scarcer and more expensive, energy prices rise as more is needed to irrigate and harvest crops, and the cost of raw materials like fertilisers skyrockets. All these factors contribute to higher prices for the end consumer as producers and retailers pass on their increased costs.

The Broader Impact on Food Prices

Olive oil is not the only food product affected by climate change; the same climatic conditions decimating olive groves also affect other essential crops, from wheat and rice to coffee and cocoa. As these staple crops become more challenging to grow, their prices rise, contributing to overall food inflation. For households already struggling with the cost of living, these increases are deeply felt, often forcing them to make difficult choices about what they can afford to eat.

The rise in food prices also disproportionately impacts poorer communities. Food constitutes a significant portion of household expenses, and any price increase can lead to food insecurity. As the cost of essential ingredients like bread, pasta, and cooking oils increases, so too does the number of people unable to afford a healthy diet.

Why Isn't This Headline News?

Given the severity of the situation, one might expect the olive oil crisis—and the broader issue of climate-driven food inflation—to dominate headlines. Yet, this story has largely been relegated to the back pages, if covered at all. Why?

Part of the answer lies in the complexity of the issue. Climate change is a slow-moving disaster, unfolding over years and decades rather than in the short bursts that typically capture media attention. News outlets often focus on immediate, dramatic events—like natural disasters, wars, or political scandals—because they are easier to report and resonate more strongly with audiences.

Moreover, the connection between climate change and inflation can sometimes be more complex and immediately visible. While people can see and feel the impact of rising prices, the underlying causes—like droughts in Spain or wildfires in Greece—are often thousands of miles away. This geographical and psychological distance makes it harder for the average person to connect the dots between what's happening in the environment and what they're paying at the store.

The media also tends to focus on the symptoms rather than the causes of problems. While inflation has been covered, it's often discussed in terms of monetary policy, supply chain disruptions, or geopolitical tensions, with little attention paid to the role of climate change. This fragmented approach prevents a holistic understanding of the issue and obscures the urgent need for climate action.

Climate change is often perceived as an abstract or distant problem, making maintaining public interest and media focus challenging. Its slow but relentless nature doesn't provide the dramatic visuals and immediate urgency that capture headlines, even though its impacts are profound and far-reaching.

The Need for Greater Awareness and Action

The spike in olive oil prices is a wake-up call, highlighting the urgent need for greater awareness of how climate change affects our everyday lives. It's not just about saving polar bears or preventing future catastrophes—climate change is here, making everything more expensive.

As citizens and consumers, we must demand more from our media and leaders. Comprehensive coverage of climate issues is essential, especially concerning inflation and the cost of living. We must also advocate for policies that address the root causes.