Research and Reports

Implications of a “Green Tariff” for the University of Hawai‘i, Hawaiian Electric Company, and other Customers

In June 2015 the State passed a law setting a goal for the University of Hawai‘i (UH) to produce as much renewable energy as the …

Nowcasting the Trajectory of the COVID-19 Recovery

I develop a weekly coincident index of economic activity in the State of Hawaii. The purpose of the index is to nowcast the recovery from …

Water demand box plots

Estimating water demand using price differences of wastewater services

Many homes in Hawai‘i use cesspools and other on-site disposal systems (OSDS) instead of the municipal sewer system. Because bills combine water and waste-water services, …

Oahu map climate change

How Will Climate Change Affect Water Demand? Evidence from Hawai‘i Microclimates

The effect that climate change will have on water resource sustainability is gaining international interest, particularly in regions where stocks are strained due to changing …

Identifying priority watershed management areas for groundwater recharge protection on Hawai‘i Island

Identifying priority watershed management areas for groundwater recharge protection on Hawai‘i Island

This report provides an analysis of the relative effectiveness of watershed conservation and restoration efforts in terms of groundwater recharge benefits in Hawaiʻi County Department …

Do natural disasters make sustainable growth impossible?

We consider the prospects for sustainable growth using expected utility models of optimal investment under threat from natural disasters. Adoption of a continuous time, stochastic …

Economic Impact of the Natural Energy Laboratory Hawaii Authority Tenant on the State of Hawaii in 2018

NELHA contracted the University of Hawaii Economic Research Organization (UHERO) to estimate its economic impact on the State of Hawaii. To estimate expenditures made by …

Wellbeing and Housing Report Supplement

The goal of this report is to summarize how neighborhood housing price appreciation can impact quality of life beyond individual level impacts (see Love and …

Drivers of well-being in Hawaii: Quantifying individual and community impacts

In Gallup’s annual well-being index, Hawaii occupied the #1 spot among US states for six out of the past 10 years (slipping to #3 in …

Assessing the impact of COVID-19 on global fossil fuel consumption and CO2 emissions

Nori Tarui

Abstract

We assess the effect of the COVID-19 pandemic on global fossil fuel consumption and CO2 emissions over the two-year horizon 2020Q1-2021Q4. We apply a global vector autoregressive (GVAR) model, which captures complex spatial-temporal interdependencies across countries associated with the international propagation of economic impact due to the virus spread. The model makes use of a unique quarterly data set of coal, natural gas, and oil consumption, output, exchange rates and equity prices, including global fossil fuel prices for 32 major CO2 emitting countries in 1984-2019. We produce forecasts of coal, natural gas and oil consumption, conditional on GDP growth scenarios based on alternative IMF World Economic Outlook forecasts that were made before and after the outbreak. We also simulate the effect of a relative price change in fossil fuels, due to global scale carbon pricing, on consumption and output. Our results predict fossil fuel consumption and CO2 emissions to return to their pre-crisis levels, and even exceed them, within the two-year horizon despite the large reductions in the first quarter following the outbreak. Our forecasts anticipate more robust growth for emerging than for advanced economies. The model predicts recovery to the pre-crisis levels even if another wave of pandemic occurs within a year. Our counterfactual carbon pricing scenario indicates that an increase in coal prices is expected to have a smaller impact on GDP than on fossil fuel consumption. Thus, the COVID-19 pandemic would not provide countries with a strong reason to delay climate change mitigation efforts.