Frosts can impact inflation and climate shocks have a negative effect, says Campos Neto

Climatic shocks have negative effects on productivity and economic activity and possible frosts ahead could impact the inflation term, said this Wednesday the president of the central bank, Roberto Campos Neto.

In a seminar promoted by Bank of Brazil (BAAS3) and the Petrobras (PETR4), Campos Neto said that discussions about the environment and sustainability are linked to monetary policy.

“I was having an inflation meeting and I was talking about the frost that is coming, what impact this could have on food and short-term inflation,” he said. “Several recent climate shocks have negative impacts, heat waves, frosts, droughts.”

At the event, Campos Neto was still opposed to ideas of creating a tax on carbon emissions.

“I hear a lot about a tax of carbon, in some cases it seems justifiable, but we believe that the market price is always the best allocator of resources in the economy”, he said.

Source: Reuters