Inflation Expectations in the Context of Climate Change and the Green Transition

Gabriele Galati, Fulvia Marotta, Richhild Moessner and Maarten van Rooij

Working Papers from DNB

Abstract: This paper studies how views on climate change shape household inflation expectations. Us-ing a new representative survey of Dutch households, we elicit perceptions of climate change, the green transition and climate policies, and their expected effects on long-run inflation. House-holds expect climate change, the green transition and three types of climate policies – carbon pricing, support for the green transition and support for green innovation – to raise inflation and inflation volatility over the next ten years. Climate change is expected to have the largest effect, while support policies are expected to have the smallest. These results suggest that climate-related beliefs are linked to the anchoring of inflation expectations and that support policies for the green transition and green innovation may facilitate the net-zero transition while keeping in-flation expectations relatively well anchored. We also document significant heterogeneity across households. Expected inflationary effects of climate change are larger among respondents who anticipate more severe global warming and extreme weather. Climate-related inflation concerns are widespread across demographic groups.

Keywords: climate change; green transition; climate policy; inflation; household expectations. (search for similar items in EconPapers)
JEL-codes: E31 E58 Q48 Q54 Q55 Q58 (search for similar items in EconPapers)
Date: 2026-10
New Economics Papers: this item is included in nep-inv and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:dnb:dnbwpp:875

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