The Effect of Coronavirus Outbreaks on the Future of Economic Growth and Carbon Dioxide Emissions in Low- and Middle-Income Countries

Subject Areas : Agricultural Economics Research

Fatemeh Fathi ¹ , Niloofar Ashktorab ²

1 - Department of Agricultural Economics, School of Agriculture, Shiraz University, Shiraz, Iran.
2 - Department of Agricultural Economics, Agricultural Engineering and Rural Development, Agricultural Sciences and Natural Resources University of Khuzestan, Mollasani, Iran.

Received: 2021-07-28 Accepted : 2022-05-28 Published : 2023-04-21

Keywords: Economic Growth, Developing Countries, CO2, Infectious disease, COVID- 19,

Abstract :

Introduction: The economic growth of any country may change due to external shocks. Disruption of the economy caused by events can change the rate of growth and GDP of countries. In the last decade, among the existing shocks, the shock caused by infectious diseases, including COVID-19, which has affected the world economy can be mentioned.
Materials and Methods: In this study, the effect of infectious diseases on greenhouse gas emissions in middle- and low-income countries in the period 2000-2019 was investigated and for this purpose, the relationship between economic growth and Kuznets environmental model for this group of countries was considered. While examining the Kuznets environmental hypothesis using direct and indirect elasticities, the effect of infectious disease on economic growth and reducing greenhouse gas emissions was calculated.
Findings: The results showed that in countries located in Asia, Africa, as well as North and South America, which are often more populous with lower national incomes and lower in terms of development, the outbreaks of infectious diseases have less effect on CO2 emissions. The greatest effect of the infectious diseases on reducing greenhouse gas emissions with elasticities of 0.044 and 0.033 are related to Ukraine and Botswana, respectively.
Conclusion: In each outbreak of infectious diseases in the world, the environment has improved and it is expected that until a cure for the new coronavirus is found, global CO2 emissions, especially in countries in lower and middle- income group in 2020, will decrease.

References:

1. Al-Mulali U, Tang CF, Ozturk I. Estimating the environment Kuznets curve hypothesis: evidence from Latin America and the Caribbean countries. Renewable and Sustainable Energy Reviews. 2015 Oct 1;50:918-24.


2. Balin BE, AKAN DM. EKC hypothesis and the effect of innovation: A panel data analysis. Journal of Business Economics and Finance. 2015;4(1).


3. Barichello R. The COVID‐19 pandemic: Anticipating its effects on Canada's agricultural trade. Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie. 2020 Jun;68(2):219-24.


4. Barro RJ, Ursúa JF, Weng J. The coronavirus and the great influenza pandemic: Lessons from the “spanish flu” for the coronavirus’s potential effects on mortality and economic activity. National Bureau of Economic Research; 2020 Mar 23.


5. Cranfield JA. Framing consumer food demand responses in a viral pandemic. Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie. 2020 Jun; 68(2):151-6.


6. Deaton BJ, Deaton BJ. Food security and Canada's agricultural system challenged by COVID‐19. Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie. 2020 Jun;68(2):143-9.


7. Dogan E, Turkekul B. CO 2 emissions, real output, energy consumption, trade, urbanization and financial development: testing the EKC hypothesis for the USA. Environmental Science and Pollution Research. 2016 Jan;23:1203-13.


8. Goenka A, Liu L. Infectious diseases, human capital and economic growth. Economic Theory. 2020 Jul;70:1-47.


9. Junyi, S. H. E. N. A simultaneous estimation of environmental Kuznets curve: evidence from China. China Economic Review. 2006; 17(4): 383-394.


10. Junyi SH. A simultaneous estimation of environmental Kuznets curve: evidence from China. China Economic Review. 2006 Jan 1;17(4):383-94.


11. Kong Y, Khan R. To examine environmental pollution by economic growth and their impact in an environmental Kuznets curve (EKC) among developed and developing countries. PloS one. 2019 Mar 26;14(3):e0209532.


12. https://www.tandfonline.com/doi/abs/10.1080/14786451.2015.1102910


13. Li T, Wang Y, Zhao D. Environmental Kuznets curve in China: new evidence from dynamic panel analysis. Energy Policy. 2016 Apr 1;91:138-47.


14. Luo S, Tsang KP. How Much of China and World GDhas the Coronavirus Reduced?.


15. Pao HT, Tsai CM. Multivariate Granger causality between CO2 emissions, energy consumption, FDI (foreign direct investment) and GDP (gross domestic product): evidence from a panel of BRIC (Brazil, Russian Federation, India, and China) countries. Energy. 2011 Jan 1;36(1):685-93.


16. Patrick HT. Financial development and economic growth in underdeveloped countries. Economic development and Cultural change. 1966 Jan 1;14(2):174-89.


17. Saab M. A. Ortí, R. B. Lacambra, J. M. CO2 Kuznets curve revisited: from cross-sections to panel data models. Investigaciones regionales: Journal of Regional Research. 2018; (40): 169-196.


18. Stern DI. The rise and fall of the environmental Kuznets curve. World development. 2004 Aug 1;32(8):1419-39.


19. Youssef AB, Hammoudeh S, Omri A. Simultaneity modeling analysis of the environmental Kuznets curve hypothesis. Energy Economics. 2016 Nov 1;60:266-74.