How Rising Prices Effect the Environment


As of a few days ago, the Consumer Price Index report was released which showed us at a 9.1% increase in prices since just last year. This is the highest the Consumer Price Index has been in 41 years and a lot of the reason for why it is increasing so much is due to the spike in the price of gasoline and supply shortages over the past few months. This increase in prices has had an effect on everyone and it raises the question of what are some of the long-term environmental impacts will this bring?


As Shostak explained in their article “What “Inflation Really Means”: “Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check”.  Purchasing power is simply how much you can buy with a US dollar or other currency. For example, if a gallon of milk was $0.50 in 2000 and is now $3.00, then we can say that the dollar had more purchasing power in 2000 than now. With that being said, it is hard to measure the purchasing power of a currency just based off of the cost of one good or service. The CPI is government sourced information which measures how much prices are rising as a result of inflation.

Housing Displacement

Housing prices have risen significantly over the past few years. According to the St. Louis Fed, the average price of a house in Q1 of 2020 was $383,000 and in Q1 of 2022 the average price was $507,800. This means that the price of a house on averaged increased 32.6% in the past two years alone. Although this is a great return on investment for people who already owned homes, this average increase in housing price has made it much harder for low-income people and families to find affordable housing. It is much harder for one to find affordable housing due to the fact that when housing prices rise, the price of rent tends to follow. This meaning, it becomes not only hard for one to find a house to buy, but also hard for one to find a house to rent leading to higher rates of homelessness. According to World Population Review, California alone has over 160,000 homeless people. With housing prices and costs of living on the rise, it will become harder for homeless people to get out of the situation they are in and will likely lead to more homelessness overall.

Global Recessions and World Hunger

When browsing through global rates section on global Consumer Price Index, we see many other countries around the world also have very high inflation over the past year. Periods of high inflation tend to be followed by recessions. Globally, we already are facing the issue of thousands of people dying every day due to starvation and a global recession would likely cause these numbers to go up even more due to the fact that some will have to make the choice to meet some needs like water, shelter, providing for their family over themselves and will not be able to meet other needs. Not to mention, due to the crisis going on in Ukraine it is projected we are likely to have a food shortage in the near future if this crisis doesn’t end even if we do not have a global recession.


Our global economy has a very large effect on our environment. The effects listed in this article are just a few of the ways of how our environment is impacted by our economic cycle. As we are potentially headed for a recession, it is important to understand some of these environmental impacts as they are generally overlooked during economic downturn.


“Federal Reserve Economic Data: Fred: St. Louis Fed.” FRED, Federal Reserve Bank of St. Louis, 2022,

Shostak, Frank. “What ‘Inflation’ Really Means: Frank Shostak.” Mises Institute, 1 Nov. 2021,

“Homeless Population by State 2022.” Homeless Population by State 2022, 2022,

Wang, Isabel, and Frances Yue. “U.S. Stocks End Lower for 4th Straight Day as CPI Data Shows Inflation at 41-Year High.” MarketWatch, MarketWatch, 13 July 2022,

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