Green Recovery Policies for the COVID-19 Crisis: Modelling the Impact on the Economy and Greenhouse Gas Emissions
By B. Lahcen, J. Brusselaers, K. Vrancken, Y. Dams, C. Paes, J. Eyckmans, Sandra Rousseau. Environmental and Resource Economics, 2020
128 citations recorded by the source corpus.
The COVID-19 pandemic induces the worst economic downturn since the Second World War, requiring governments to design large-scale recovery plans to overcome this crisis. This paper quantitatively assesses the potential of government investments in eco-friendly construction projects to boost the economy and simultaneously realise environmental gains through reduced energy consumption and related greenhouse gas emissions. The analysis uses a Computable General Equilibrium model that examines the macroeconomic impact of the COVID-19 crisis in a small open economy (Belgium). Subsequently, the impact of the proposed policy is assessed through comparative analysis for macroeconomic parameters as well as CO2 equivalent emissions for four scenarios. Our findings demonstrate that the COVID-19 pandemic damages economies considerably, however, the reduction in emissions is less than proportionate. Still, well-designed public policies can reverse this trend, achieving both economic growth and a disproportionally large decrease in emissions. Moreover, the positive effect of such a decoupling policy on GDP is even stronger during the pandemic than compared to the pre-COVID-19 period. This is the result of a targeted, investment-induced green transition towards low energy-intensive economic activities. Finally, this paper describes how the net effect on the government budget is positive through the indirect gains of the economic uptake.
Subfields: Economics and Econometrics, Global and Planetary Change, Renewable Energy, Sustainability and the Environment
View Paper: https://www.semanticscholar.org/paper/395f2bc2e1ee56d81868e09882ee8633d04f7b19
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Citations in the corpus
- The effects and reacts of COVID-19 pandemic and international oil price on energy, economy, and environment in China (2021, methodology): “Such as, Lahcen et al. (2020) [21] applied a CGE model in Belgium to analyze the impact on the economy and CO2 emissions.”