Covid-19 and a Green Recovery?

Aditya Goenka, Lin Liu and Manh Hung Nguyen
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Lin Liu: University of Liverpool

Discussion Papers from Department of Economics, University of Birmingham

Abstract: Preliminary evidence indicates that pollution increases severity and likelihood of Covid- 19 infections as is the for many other infectious diseases. This paper models the interaction of pollution and preventive actions on transmission of infectious diseases in a neoclassical growth framework where households do not take into account how their actions affects disease transmission and production activity results in pollution which increases likelihood of infections. Household can take private actions for abatement of pollution as for controlling disease transmission. Disease dynamics follow SIS dynamics. We study the difference in health and economic outcomes between the decentralized economy, where households do not internalize the externalities, and the socially optimal outcomes, and characterize the taxes and subsidies that will decentralize the socially optimal outcomes. Thus, we examine the question whether there are sufficient incentives to reduce pollution, both at the private and public levels, once its effects on disease transmission is taken into account.

Keywords: Covid-19; pollution; environmental policy; infectious disease; Green Recovery; dynamic Pigovian taxes (search for similar items in EconPapers)
JEL-codes: C61 E22 H23 I15 Q53 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2020-11
New Economics Papers: this item is included in nep-ene, nep-env, nep-hea and nep-res
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Downloads: (external link)
https://repec.cal.bham.ac.uk/pdf/20-29.pdf

Related works:
Journal Article: COVID-19 and a Green Recovery? (2021)
Working Paper: Covid-19 and a Green Recovery? (2021)
Working Paper: Covid-19 and a Green Recovery? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:bir:birmec:20-29

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