Climate change seems to be one of the most talked about topics in the near future... This issue is no longer just an environmental problem but is becoming a crisis that threatens global economic stability.

Studies show that the effects of climate change on the world economy have reached serious dimensions, especially in developing countries. According to a study conducted by the Potsdam Institute for Climate Impact Research (PIK) on global income loss and economic growth; it is estimated that the world economy may lose 19 percent of its income by 2050 due to climate change. In numerical terms, this corresponds to an annual economic loss of $38 trillion.

In an environment where many countries are struggling with inflation, climate change poses a risk of seriously affecting inflation if the necessary measures are not taken sufficiently. According to a study conducted by the European Central Bank (ECB) together with scientists; climate change will increase food costs worldwide by 1.49 percent to 1.79 points each year until 2035.

This situation poses a serious threat especially for low-income households. In addition, the impact of climate change on general inflation will be between 0.76 and 0.91 points annually, depending on the best and worst-case scenarios. This is of increasing importance in terms of the conduct of monetary policy and the ability of central banks to maintain price stability in the future.

Drought and water scarcity caused by climate change can lead to serious losses, especially in sectors such as agriculture, manufacturing, mining and construction. On the other hand, water scarcity will inevitably have negative effects on hydroelectric production, transportation and industrial operations.

We should not forget that this situation is also a significant risk factor in terms of energy production and distribution. Pressure on the financial system At the same time, climate change can also put pressure on the financial system. Firms located in regions most exposed to the physical risks created by the climate crisis in particular may face many financial risks that will affect their credibility.

Thus, it may cause an increase in the expected losses in banks' credit portfolios. As a result, climate change will affect the global economy in many ways. Income losses, increased inflation, water scarcity and financial risks are just a few of these effects. Climate change mitigation and adaptation policies must be placed at the centre of urgent economic planning, otherwise economic stability and prosperity will be seriously threatened.