New estimates highlight global economic and environmental impacts of COVID-19

The Coronavirus (COVID-19) pandemic has resulted in an estimated global consumption loss of $3.8 trillion, as well as a notable job and income loss. However, these socioeconomic impacts are accompanied by notable estimated reductions in air pollution. Manfred Lenzen of the University of Sydney, Australia, and colleagues present these findings in the open-access journal PLOS ONE on July 9, 2020.

Beyond its health consequences, the COVID-19 pandemic and associated lockdowns have appeared in major social and economic losses worldwide. While some countries, such as China and the United States, have experienced larger direct economic effects than others, the entire world economy has been impacted through international trade links.

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To help explain the global socioeconomic impact of COVID-19, Lenzen and colleagues applied an economic modeling approach identified as multi-region input-output (MRIO) analysis to data on losses experienced by global businesses as a direct result of the coronavirus pandemic. The MRIO approach enabled the researchers to account for how losses in particular nations impact the entire global economy through international supply chains.

The analysis exposed that the pandemic has appeared in an estimated global consumption loss of $3.8 trillion, followed by job losses equivalent to 147 million full-time positions, as well as a loss of $2.1 trillion in wages and salaries.

As a silver lining, however, reductions in production and air travel have appeared in environmental benefits. The MRIO analysis estimates a 2.5 metric gigaton reduction in greenhouse gasses, as well as significant reductions for other air pollutants, including PM2.5, sulfur dioxide, and NOx gases.

The authors note that decisions made in response to the ongoing pandemic could shape the future of humanity. They outline a choice between returning to “business as usual,” which could leave humanity vulnerable to additional crises, or altering the global economy with an eye towards sustainability and resiliency.

Co-author Arunima Malik summarizes: “Our study highlights the interconnected nature of international supply chains, with observable global spillover effects across a range of industry sectors, such as manufacturing, tourism and transport.”

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