Design of a Covid-19 model for environmental impact: From the partial equilibrium to the Computable General Equilibrium model

Tchoffo, Rodrigue (2021): Design of a Covid-19 model for environmental impact: From the partial equilibrium to the Computable General Equilibrium model.

Abstract

The Covid-19 pandemic led to a loss of employment in many sectors of the economy around the world. This negatively affected the industry capacity of production of many countries. Linking the CO2 emissions to the production capacity, the total pollution is likely to decrease. We investigate this issue by designing a simple environmental model based on the partial equilibrium (PE). We test this theoretically and empirically using recent data on the total contamination for four regions and countries. Then, we link our model to the CGE model of Hosoe et al. (2010) to capture the impact on other sectors of the economy. The final model PE-CGE is therefore designed through the household consumption demand channel. Broadly, our findings show that the environmental impact of the pandemic depends on the structure of the economy. While the USA, China and Sub-Saharan Africa reduce their CO2 emissions, that of the EU rather increases.

• Item Type: MPRA Paper
• Language: English
• Keywords: Partial Equilibrium, Computable General Equilibrium, Covid-19, CO2 emissions, Employment, Production
• Subjects: C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C68 - Computable General Equilibrium Models; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q51 - Valuation of Environmental Effects

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