Inessa Love

UHERO Research Fellow and Professor of Economics

Education

Ph.D. Finance and Economics, Columbia University, Graduate School of Business, New York, 2001.
M.A. Financial Economics, The American University, Washington DC, 1996.
B.A. Mathematics, Diploma, Zaporozhye State University, Ukraine, 1992.

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 …

The Miracle of Microfinance Revisited: Evidence from Propensity Score Matching

We provide new evidence on the effectiveness of microfinance intervention for poverty alleviation. We apply the Propensity Score Matching (PSM) method to data collected 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.