Assessing the “negative effect” and “positive effect” of COVID-19 in China

Abstract

The COVID-19 pandemic lockdowns led to a sharp drop in socio-economic activities in China in 2020, including reductions in fossil fuel use, industry productions, and traffic volumes. China's economy suffered a serious negative effect from COVID-19. However, there is a “positive effect” on CO2 emissions reduction. Here, for the first time, this paper constructs a new model named “Weighted Multi-regional Hypothetical Extraction Method (WMHEM)” based on a multiregional input-output model. It not only solves the problems of traditional HEM methods such as improper use of assumptions, excessive reliance on industry intermediate input, but also accurately reflects the impact of external shocks on the inter-industry linkages. By using the monthly economic data of each provinces in China during COVID-19 (except Hong Kong，Macao and Taiwan) an the latest Multi-regional input-output tables, the “economic negative effect” and “CO2 emission positive effect” under COVID-19 in China are measured. Results show that COVID-19 lockdown was estimated to have reduced China's CO2 emissions substantially between January and March in 2020, with the largest reductions in February. With the spread of coronavirus controlled, China's CO2 emissions rebounded in April. In addition, key emission reduction sectors and key development encouraged sectors are selected by combining “economic negative effect” and “CO2 emission positive effect” during COVID-19. Therefore, policies recommendations are put forward based on forward and backward linkages respectively which are from two ends of the supply chain to turn pandemic-related CO2 emissions declines into firm climate action.