Modeling economic losses and greenhouse gas emissions reduction during the COVID-19 pandemic: Past, present, and future scenarios for Italy

• Published in: Economic modelling 2022-05, Vol.110, p.105807-105807, Article 105807
• Main Authors: Cottafava, Dario, Gastaldo, Michele, Quatraro, Francesco, Santhiá, Cristina
• Format: Article
• Language: English
• Subjects: COVID-19; Dynamic input output; Greenhouse gas; Inoperability; Input output; Macroeconomic industrial structure
• ISSN: 0264-9993; 1873-6122; 0264-9993
• DOI: 10.1016/j.econmod.2022.105807

Unprecedented nationwide lockdowns were adopted because of the COVID-19 pandemic. Understanding the socioeconomic impact of the past and future restrictions while assessing the resilience of a local economy emerged as a worldwide necessity. To predict the economic and environmental effects of the lockdowns, we propose a methodology based on the well-established input–output inoperability model, using Italy as a case study. By reconstructing the 2020 restrictions, we analyzed the economic losses and greenhouse gas emissions reductions, identifying the most economically impacted sectors because of the restrictions and the sectoral interdependencies and those avoiding most air emissions. We constructed four partial-lockdown scenarios by minimizing the economic losses for increasing restrictions to highlight the model's utility as a tool for policymaking. By revealing the most interconnected and, thus, crucial sectors, the simulated scenarios showcase how the restrictions can be selected to avoid sudden and unpredicted economic damage. •Predicting the economic and environmental effects of Covid-19 lockdowns is crucial.•Dynamic IO modeling is considered for the resilience evaluation of economic sectors.•We reconstruct the 2020 restrictions in Italy as a case study to test the model.•Sectors' inoperability, economic losses and GHG emission reduction are misaligned.•Scenario analysis supports restrictions' strategies minimizing economic damages.