How Energy Costs Are Driving Inflation
How Energy Costs Are Driving Inflation

Inflation and high energy costs have become a real problem in recent years due to COVID-19 and its effects on the world’s economies.

Between the government’s coronavirus relief spending and the shutdowns and restrictions placed on millions of businesses worldwide, the pandemic slowed down productivity in several marketplaces. One of those markets is the energy industry.

You may have noticed that energy costs have skyrocketed over the last few years due to inflation.

A big reason is the decrease in oil production and the higher transportation costs due to travel restrictions.

And if you remember your economics class from high school, a low supply of any product means a higher demand and price.

Human dependency on fossil fuels continues to be devastating, not just for the environment.

For example, fossil fuel dependency has contributed to rising energy costs for hundreds of millions of people who drive motor vehicles and rely on gas and electricity for heating and air conditioning.

The continued dependency on fossil fuels subjects people to higher energy costs whenever a national or global catastrophe strikes that contributes to inflation.

Higher Energy Costs Effects Nearly Every Industry 

Ordinary people are not the only ones affected by higher energy costs. Virtually every company that must transport raw materials and goods also gets affected.

It doesn’t matter if the company sells computers, food, or beauty products because all of these items rely on the transportation industry to get from Point A to Point B.

Due to the higher energy costs, the manufacturers and suppliers have to raise the prices of their goods for end consumers to compensate.

As a result, the higher energy costs create a ripple effect across multiple industries, further driving inflation through the roof for everyone. 

Fortunately, many national governments worldwide have been lifting their pandemic restrictions on transportation and travel over the last year.

This has allowed oil production to increase to higher levels and allowed a modest decrease in the price of oil and gas for businesses and consumers.

However, energy costs and inflation have not dropped to the levels we would like to see them at.

The continued high prices of necessities like food, housing, cars, clothes, and fuel have decreased consumer spending, which causes less profits and more layoffs for businesses.

Green Energy Can Stop Inflation  

Unfortunately, the global threat of deadly viruses, massive storms, global warming, and other natural disasters will continue to plague us physically, mentally, and financially.

Moreover, these threats will always increase energy costs because they slow down oil production and transportation.

It is unrealistic to think there will ever be a time when energy costs will be low again. So, if there was ever a better time to invest in green energy technology, it is now.

Green energy is the key to stopping the rise of inflation because it can be produced locally without relying on national or international transportation of oil and gas.

Imagine if the world was no longer dependent on fossil fuels and a pandemic struck. If that were the case, businesses across all industries would feel less economic impact because they wouldn’t have to fill their vehicles and ships with fossil fuels.

Then it would be a lot less costly to transport goods and services to people if green energy were fueling it all.

The United States and the United Kingdom are already moving toward switching to renewable energy and phasing out carbon-based energy.

In fact, the British government plans to achieve net-zero carbon emissions in the United Kingdom by the year 2050.

This would benefit the environment, but experts say it would also significantly reduce global inflation.

Will we ever get there? We must switch to green energy if we want to stop global warming and reduce inflation. Let’s hope the skeptics in government will realize this before it’s too late for everybody.

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