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The Impact of Direct and Indirect COVID-19 Related Demand Shocks on Sectoral CO 2 Emissions: Evidence from Major Asia Pacific Countries

Muhammad Jawad Sajid () and Ernesto D. R. Santibanez Gonzalez ()
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Muhammad Jawad Sajid: School of Engineering Management, Xuzhou University of Technology, Xuzhou 221000, China
Ernesto D. R. Santibanez Gonzalez: Department of Industrial Engineering, CES4.0, Faculty of Engineering, University of Talca, Los Niches Km 1, Curicó 74104, Chile

Sustainability, 2021, vol. 13, issue 16, 1-19

Abstract: COVID-19’s demand shocks have a significant impact on global CO 2 emissions. However, few studies have estimated the impact of COVID-19’s direct and indirect demand shocks on sectoral CO 2 emissions and linkages. This study’s goal is to estimate the impact of COVID-19’s direct and indirect demand shocks on the CO 2 emissions of the Asia-Pacific countries of Bangladesh, China, India, Indonesia, and Pakistan (BCIIP). The study, based on the Asian Development Bank’s COVID-19 economic impact scenarios, estimated the impact of direct and indirect demand shocks on CO 2 releases using input–output and hypothetical extraction methods. In the no COVID-19 scenario, China emitted the most CO 2 (11 billion tons (Bt)), followed by India (2 Bt), Indonesia (0.5 Bt), Pakistan (0.2 Bt), and Bangladesh (0.08 Bt). For BCIIP nations, total demand shocks forced a 1–2% reduction in CO 2 emissions under a worst-case scenario. Given BCIIP’s current economic recovery, a best or moderate scenario with a negative impact of less than 1% is more likely in coming years. Direct demand shocks, with a negative 85–63% share, caused most of the CO 2 emissions decrease. The downstream indirect demand had only a 15–37% contribution to CO 2 emissions reduction. Our study also discusses policy implications.

Keywords: Asia Pacific; COVID-19; CO 2 emission; demand shock; hypothetical extraction method; input–output model; sectoral linkage; sustainability (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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