Projects / Programmes
Towards a green recovery: Modelling the effect of COVID-19 response policies on the economy and greenhouse gas emissions
| Code |
Science |
Field |
Subfield |
| 5.02.00 |
Social sciences |
Economics |
|
| Code |
Science |
Field |
| 5.02 |
Social Sciences |
Economics and Business |
COVID-19, recovery, environment, climate change, CGE models, policy, GHG emissions
Researchers (1)
| no. |
Code |
Name and surname |
Research area |
Role |
Period |
No. of publicationsNo. of publications |
| 1. |
38168 |
PhD Miha Dominko |
Economics |
Head |
2021 - 2024 |
92 |
Organisations (1)
| no. |
Code |
Research organisation |
City |
Registration number |
No. of publicationsNo. of publications |
| 1. |
0502 |
Institute for Economic Research |
Ljubljana |
5051690000 |
2,474 |
Abstract
We are currently faced with two overlapping crises that are threatening the life as we know it. Both the Covid-19, as well as the climate crisis pose an extreme threat to human progress, despite their different center, intensity, and immediacy of their impacts. While the Covid-19 pandemic is marked by intense multi-month effects on individuals and health systems, climate change is gradually affecting natural and human systems. Immediate and simultaneous policy response to both crises is needed. However, mitigating the effects of each of these two crises requires mobilization of enormous resources, which are limited. The need for a synergistic approach to achieve efficient use of public funds is therefore of particular significance. To provide answer on how to achieve these synergies, a comprehensive analysis of pandemic and climate change mitigation policies is needed that considers the entire economy. Unfortunately, current studies mostly study these issues in a partial setting. To address this concern and provide a holistic overview, we will develop a dynamic interregional multisectoral small market economy (Slovenia) computable general equilibrium (CGE) model for environmental analysis. The use of a CGE model in the context of the Covid-19 pandemic has several advantages, as it will allow us to provide both an assessment of the pandemic on macroeconomic variables and greenhouse gas emissions, as well as policy measures (e. g. green investment policies, government subsidies) by identifying the economic channels through which the primary effects of the outbreak manifest themselves. Furthermore, it will advance the understanding of the potential influence of this pandemic on the evolution of economic activities and broader linkages, for example between GDP and greenhouse gas emissions. Finally, it will provide quantitative evidence to better inform policy decisions by answering questions regarding the sectoral and distributional impact of different policies. The work programme is structured around four work packages (WP) over two years. It builds upon the project leader’s scientific performance on environmental economics and economic modelling to ensure that the carried-out work is of high quality and completed within the required timeframe. In the first WP, a bibliometric analysis of CGE research in the fields of climate change and recovery policy will be conducted, which will allow us to identify the relevant research gaps, as well as possible policy scenarios. In this WP we will also establish a general design of the model, gather all the relevant data, and construct a social accounting matrix (SAM) of Slovenia, which will serve as a key input of our CGE model. In the second WP, we will develop and validate the model, which will allow for changes in the structure of the economy, including the change in energy prices, alterations in the structure of production, changes in the composition of consumption, the decline in the labor force participation rate, the government investment package, as well as changes in the composition of trade. In the third WP, we will run simulation scenarios, provide a systematic sensitivity analysis using the Monte Carlo and Gaussian quadrature methods, as well as offer a comprehensive interpretation of the results. The final WP will concern the management of the project, including risk management, which will ensure the proper achievement of milestones and deliverables. Furthermore, the WP will provide a successful dissemination of the results to both the academic, as well as non-academic public, which will hopefully foster the right actions that will lead us into a green sustainable post-pandemic future.
