Persistently higher inflation and interest rates are probably in the offing as the world transitions to a greener economy. That’s hardly a selling point for politicians pushing climate-friendly policies, but it’s one they’ll have to cozy up to, says Isabel Schnabel, an executive board member of the European Central Bank. Unfortunately, she adds, before politicians will show enough urgency toward the threat of global warming, “it really seems that bad things have to happen.”

On this week’s episode, Schnabel tells Stephanie about the financial consequences of the green transition, as the world moves away from fossil fuels and toward renewable energy. Eventually, she sees energy costs from solar, wind and other renewable sources falling below today’s prices for oil, gas and coal. But in the interim, people can expect traditional energy prices to rise as producers have less and less incentive to invest in fossil fuels. There’s also likely to be a spike in lithium, copper and nickel prices as green energy companies expand, Schnabel says. Finally, the massive investment needed from governments and the private sector to make the transition happen will probably lead to higher interest rates.

Still, procrastinating isn’t an option. “Waiting makes everything much worse, much more costly in economic terms,” Schnabel says. In a related report, Bloomberg Opinion columnist Jonathan Levin shares how people in Miami don’t seem to be heeding the looming threat posed by the climate crisis. Despite rising sea levels, the tourist mecca’s real estate market is soaring and buyers seldom see disclosures about future flood risk.

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