Greenflation

The race to achieve net zero emissions is the recent global trend to promote carbon neutrality. Greenflation is one of the consequences of the popular phenomenon of going green. The price of materials and minerals, among others, utilized in the development of renewable technologies has climbed sharply as countries are transitioning their industries to ozone-friendly and sustainable methods. Unlike previous transitions where the world shifted from biomass to fossil fuel, the current changeover to green energy is unparalleled, urgent, and inflationary. The report highlights the causes and consequences of greenflation as well as associated challenges faced in the near term. It also illustrates how greenflation can negatively impact the bond portfolios of the developed nations.