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Covid-19 and Climate Change: A Tale of Two Global Problems

Author

Listed:
  • Rolando Fuentes
  • Marzio Galeotti
  • Alessandro Lanza
  • Baltasar Manzano

Abstract

In this paper, we examine the similarities and the differences between two global problems, the Coronavirus pandemic and climate change, and the extent to which the experience with the Covid-19 pandemic can be of use for tackling climate change. We show that both problems share the same microeconomic foundations in that both entail the overprovision of a global public bad and entail externalities whose correction comes at very high economic and social costs. We leverage on a well-established problem such as climate change, that has been studied for several years now, to highlight the common traits with the Covid-19 pandemic, but also important differences. The Covid-19 crisis is itself a reality check for climate policy, international governance and prevention in general. Indeed, the Covid-19 pandemic is a mock laboratory of climate change, where the time scale of unfolding events is reduced from decades to days. While the former is often measured in days, weeks, months, years, the latter is measured in years, decades, and centuries.

Suggested Citation

  • Rolando Fuentes & Marzio Galeotti & Alessandro Lanza & Baltasar Manzano, 2020. "Covid-19 and Climate Change: A Tale of Two Global Problems," GREEN Working Papers 09, GREEN, Centre for Research on Geography, Resources, Environment, Energy & Networks, Universita' Bocconi, Milano, Italy.
  • Handle: RePEc:bcu:greewp:greenwp09
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    File URL: https://repec.unibocconi.it/iefe/bcu/papers/GREEN_wp09.pdf
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    References listed on IDEAS

    as
    1. Robert J. Barro & José F. Ursúa & Joanna Weng, 2020. "The Coronavirus and the Great Influenza Pandemic: Lessons from the “Spanish Flu” for the Coronavirus’s Potential Effects on Mortality and Economic Activity," NBER Working Papers 26866, National Bureau of Economic Research, Inc.
    2. Andrew Atkeson, 2020. "What Will be the Economic Impact of COVID-19 in the US? Rough Estimates of Disease Scenarios," Staff Report 595, Federal Reserve Bank of Minneapolis.
    3. Banerjee, Abhijit V. & Duflo, Esther, 2005. "Growth Theory through the Lens of Development Economics," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 7, pages 473-552, Elsevier.
    4. Martin S Eichenbaum & Sergio Rebelo & Mathias Trabandt, 2021. "The Macroeconomics of Epidemics [Economic activity and the spread of viral diseases: Evidence from high frequency data]," The Review of Financial Studies, Society for Financial Studies, vol. 34(11), pages 5149-5187.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Coronavirus; Covid-19; climate change; global public goods; mitigation; adaptation; technological innovation;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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