Exploring the risk and economic vulnerability of global energy supply chain interruption in the context of Russo-Ukrainian war

Lianbiao Cui, Suyun Yue, Xuan-Hoa Nghiem and Mei Duan

Resources Policy, 2023, vol. 81, issue C

Abstract: The Russo-Ukrainian war intensified the risk of global energy supply chain disruption, causing not only sharp fluctuations in energy prices in a short period of time but also disruptions to the global energy supply and economic and trade orders, with profound effects on global political and economic patterns in the long term. To explore the macroeconomic impact of the energy interruption caused by the Russo-Ukrainian war, a global multi-regional, multi-sector computable general equilibrium model was used for the empirical analysis. The results show that trade interruption alone would significantly impact the Ukrainian economy, causing its real GDP to fall by 4.18%. However, if the United States (US) and the Europe Union (EU) stop importing energy from Russia, the latter's economy will suffer a devastating blow, with a maximum decline in its real GDP reaching 5.49%. Developed countries are likely to incur heavy economic costs owing to their energy sanctions imposed against Russia. However, these costs are mainly borne by European nations, whereas the US suffers limited economic losses. Moreover, the Russo-Ukrainian war has limited impacts on global carbon abatement. In the strictest scenario, global energy consumption and carbon emissions will decrease by 0.600% and 0.915%, respectively. Exploring the boundary effects of the Russo-Ukrainian war on economic growth, energy consumption, and carbon emissions is useful for understanding the complex relationship between geopolitical conflicts, natural resource utilization, and carbon emissions.

Keywords: Russo-Ukrainian war; Energy trade; Carbon emissions; Economic vulnerability; Computable general equilibrium model (search for similar items in EconPapers)
JEL-codes: C68 F14 F17 Q53 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:81:y:2023:i:c:s0301420723000818

DOI: 10.1016/j.resourpol.2023.103373

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