Are climate risks helpful for understanding inflation in BRICS countries?

Abstract

Scholars have studied the effect of climate risks on economies and finances, but they have yet to agree. We take the BRICS countries as an example to join this discussion and adopt a series of tests to detect the existence of this effect. We find that, on average, climate risk has an impact on inflation in China, India and Russia. The impact of climate risk on Russia has more structural breakpoints than that of other countries. Furthermore, climate risk appears to have a short-term impact on inflation in India and South Africa, implying that these two countries are more sensitive to climate change.