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COVID-19 and the Paris Agreement target: A CGE analysis of alternative economic recovery scenarios for India

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  • Pradhan, Basanta K.
  • Ghosh, Joydeep

Abstract

In this paper the Covid-19 pandemic has been analysed from sustainability and climate change perspectives with the help of a recursive dynamic CGE model for India. The Covid-19 could have major long term impacts on GDP, household income, inequality, CO2 emissions, and carbon prices. Significant slowdown in labour intensive informal sectors such as construction and services, as well as in energy intensive and capital goods sectors, leads to adverse impacts on household income and inequality. Our analysis further suggests that climate policy consistent with the Paris Agreement target can complement the economic recovery process. Specifically, recycling of carbon tax revenues to investments could stimulate growth and employment, reduce inequality, and reduce carbon emissions, compared to a scenario without climate policy. Therefore, the need of the hour is to formulate and implement climate friendly recovery strategies.

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  • Pradhan, Basanta K. & Ghosh, Joydeep, 2021. "COVID-19 and the Paris Agreement target: A CGE analysis of alternative economic recovery scenarios for India," Energy Economics, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:eneeco:v:103:y:2021:i:c:s0140988321004163
    DOI: 10.1016/j.eneco.2021.105539
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    References listed on IDEAS

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    1. Lucas Chancel & Thomas Piketty, 2019. "Indian Income Inequality, 1922‐2015: From British Raj to Billionaire Raj?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(S1), pages 33-62, November.
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    4. Pradhan, Basanta K. & Ghosh, Joydeep, 2019. "Climate policy vs. agricultural productivity shocks in a dynamic computable general equilibrium (CGE) modeling framework: The case of a developing economy," Economic Modelling, Elsevier, vol. 77(C), pages 55-69.
    5. Pradhan, Basanta K. & Ghosh, Joydeep & Yao, Yun-Fei & Liang, Qiao-Mei, 2017. "Carbon pricing and terms of trade effects for China and India: A general equilibrium analysis," Economic Modelling, Elsevier, vol. 63(C), pages 60-74.
    6. Manisha Jain, 2020. "Drivers of change in India's energy-related carbon dioxide emissions during 1990-2017," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2020-019, Indira Gandhi Institute of Development Research, Mumbai, India.
    7. World Bank & Ecofys & Vivid Economics, "undated". "State and Trends of Carbon Pricing 2016," World Bank Publications - Reports 25160, The World Bank Group.
    8. Mani,Muthukumara S. & Hussein,Zekarias & Gopalakrishnan,Badri Narayanan & Wadhwa,Deepika, 2018. "Paris climate agreement and the global economy : winners and losers," Policy Research Working Paper Series 8392, The World Bank.
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    2. Weijiang Liu & Min Liu & Tingting Liu & Yangyang Li & Yizhe Hao, 2022. "Does a Recycling Carbon Tax with Technological Progress in Clean Electricity Drive the Green Economy?," IJERPH, MDPI, vol. 19(3), pages 1-18, February.
    3. Tobias Mueller & Steven Gronau, 2023. "Fostering Macroeconomic Research on Hydrogen-Powered Aviation: A Systematic Literature Review on General Equilibrium Models," Energies, MDPI, vol. 16(3), pages 1-33, February.
    4. Jiang, Shiqi & Lin, Xinyue & Qi, Lingli & Zhang, Yongqiang & Sharp, Basil, 2022. "The macro-economic and CO2 emissions impacts of COVID-19 and recovery policies in China," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 981-996.
    5. Qin Li & Rosmah Mohamed & Anuar Mahomed & Hanna Khan, 2022. "The Effect of Perceived Organizational Support and Employee Care on Turnover Intention and Work Engagement: A Mediated Moderation Model Using Age in the Post Pandemic Period," Sustainability, MDPI, vol. 14(15), pages 1-15, July.
    6. Okorie, David Iheke & Wesseh, Presley K., 2023. "Climate agreements and carbon intensity: Towards increased production efficiency and technical progress?," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 300-313.

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