Climate Change, Natural World Preservation and the Emergence and Containment of Infectious Diseases

Scientific evidence suggests that anthropogenic impacts on the environment such as land use changes and climate change promote the emergence of infectious diseases in humans. We develop a two-region epidemic-economic model which unifies short-run disease containment policies with long-run policies which could control the drivers and the severity of infectious diseases. We structure our paper by linking a susceptible-infected-susceptible model with an economic model which includes land use choices for agriculture and climate change and accumulation of knowledge that supports land augmenting technical change. The contact number depends on short-run containment policies (e.g., lockdown, vaccination), and long-run policies affecting land use, the natural world and climate change. Climate change and land use changes have an additional cost in terms of infectious disease since they might increase the contact number in the long run. We derive optimal short-run containment controls for a Nash equilibrium between regions, and long-run controls for climate policy, land use and knowledge at an open loop Nash equilibrium and the social optimum and unify the short- and long-run controls. We explore the impact of ambiguity aversion and model misspeciffication in the unified model and provide simulations which support the theoretical model.