The climate has perhaps finally stopped being merely a footnote in reports published by the world's largest economic bodies, becoming instead a factor that forms an integral part of forecasts for future scenarios. This is certainly a good thing, though one can only hope it is not too late. In the latest document from the OECD, the Organisation for Economic Co-operation and Development, the climate issue now travels on equal footing with energy and finance among the factors that will determine the trajectory of global growth over the next two years. The prospects, needless to say, are not particularly reassuring — for economists or for ordinary citizens.

El Niño frightens the economy

The OECD Interim Economic Outlook report published at the end of September 2026 places centre stage the potential impact on the global economy of a possible imminent El Niño episode of exceptional intensity: and it would be more accurate to say near-certain rather than merely possible, given that — as the OECD underlines, according to estimates from the National Oceanic and Atmospheric Administration (NOAA), the probability of an extreme episode driven by the cyclone developing between October and December 2026 stands at 95 per cent.

An El Niño of exceptional magnitude, the OECD explains, disrupts rainfall patterns and ocean temperatures in ways that strike at the most vulnerable agricultural regions: the report thus points to a higher likelihood of drought in Australia, weakened monsoons in India, and drought in Indonesia and Southeast Asia. It also warns that episodes of this scale can push global food prices higher for up to two years. Translated into figures: in the risk scenario constructed in the report, the OECD projects that in 2027 food prices could be 10 per cent higher than baseline projections, with an impact on agricultural output estimated at around a quarter of a percentage point of GDP in the most exposed economies, particularly Latin America, Africa and the Asia-Pacific region. Compounding the situation, Gulf fertiliser supplies — still under strain — risk weighing on future crop yields more heavily than previously anticipated.

Taken together, all the shocks considered in the report (climate, energy, financial markets) could cost 0.7 percentage points of global growth in 2027 and add 1.1 percentage points of inflation. These may seem like cold numbers, but the impact on the daily lives of billions of people could be enormous: difficulty finding food products in markets, sky-high prices — to say nothing, of course, of the natural hazards arising from extreme weather events.

An end to environmentally harmful subsidies

In the report, climate risk does not travel alone but is intertwined with energy risk: gas stocks in Europe are at their lowest levels recorded at this time of year in over fifteen years, the OECD notes, while petrol and diesel have risen sharply almost everywhere. The OECD therefore suggests that public support measures against high energy costs should be targeted at the most vulnerable households and small businesses, without, however, discouraging energy saving or source diversification, and with clearly defined expiry dates: a clear no, then, to blanket tax relief — such as the notorious environmentally harmful subsidies — or price caps (like those introduced in certain sectors in Italy as well), which are costlier for public finances and less effective.

Among the longer-term reforms suggested, the OECD cites diversification of energy sources and improvements in efficiency, through regulatory standards, information campaigns and targeted incentives. There is also a paradox worth noting: a very intense El Niño could raise winter temperatures in the northern hemisphere, as already happened in 2023–2024, thereby reducing energy demand and easing some of the pressure on gas prices in Europe. A side effect that may be positive in the short term, but which is in reality yet another alarm bell signalling a warming that is no longer a hypothesis or a prospect, but a pressing reality.