ECB official Frank Elderson addressed the 7th World Congress of Environmental and Resource Economists on July 2, 2026. He linked inflation volatility in the euro area to the Middle East conflict and climate extremes, noting that Europe’s dependence on imported fossil fuels makes it vulnerable. ECB projections show a baseline scenario with moderate growth and inflation, while an adverse scenario predicts lower growth and higher inflation, and a severe scenario could push inflation above 6 %. He highlighted how heatwaves raise food prices and how climate risks can damage economic activity. Elderson praised falling renewable costs, citing that solar and wind are now cheaper than fossil fuels, and cited lower electricity prices and reduced air‑pollution deaths as benefits. He outlined four barriers—carbon‑pricing gaps, regulatory uncertainty, finance access, and upfront costs—and urged coordinated policy action.
© European Central Bank, 2025.
Summary derived from the ECB website (https://www.ecb.europa.eu ).
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