Unexpectedly Intriguing!
July 16, 2020
Coronavirus Service Sign at The Doghouse in St. John's - Source: Erik Mclean via Unsplash - https://unsplash.com/photos/0zxe8y3iVa8

We are no longer alone in estimating the economic impact of the global coronavirus pandemic by measuring changes in the concentration of carbon dioxide in the Earth's atmosphere!

We learned that from a press release earlier this month from the University of Sydney, which announced a study quantifying the negative economic impact of the pandemic through 22 May 2020. Here's an overview of their findings:

The first comprehensive study of the pandemic shows consumption losses amount to more than US$3.8 trillion, triggering full-time equivalent job losses of 147 million and the biggest-ever drop in greenhouse gas emissions.

The international group of researchers, using a global and highly detailed model, found that most directly hit was the travel sector and regions of Asia, Europe, the United States, with cascading multiplier effects across the entire world economy because of globalisation.

The loss of connectivity imposed to prevent the virus spreading triggers an economic 'contagion', causing major disruptions to trade, tourism, energy and finance sectors, while easing environmental pressures most in some of the hardest-hit areas.

This study focuses on 'live' data to 22 May (with the exception of air travel, for which only a 12-month forecast exists), differing from most assessments of the economic impacts of the pandemic based on scenario analyses and/or projections - and it is the first to provide an overview of the combined economic, social and environmental impacts, including indirect effects, of the coronavirus.

How does that compare to our first back-of-the-envelope estimate, which looked to answer the question back in early April? Back then, we found "a reduction in World GDP through March 2020 of $3.988 trillion", which means our ready reckoning result has proven to be within the right order of magnitude of the findings of the world's first comprehensive study of the pandemic assembled by a team of international researchers using a global and highly detailed model!

That, of course, is the whole point of back of the envelope estimates! It's all about getting within a reasonable margin of error with the limited data available, where getting the order of magnitude right means we have a viable tool for doing that job.

But our estimate also begs a question. Our initial estimate applies through March 2020, while the University of Sydney's researchers took theirs through 22 May 2020. Let's do a quick update using our method through May 2020, the relevant data for which has been set as the default entries in the following tool. If you're accessing this article on a site that republishes our RSS news feed, you may need to click through to our site to access a working version, and possibly even to see the rest of this article!

Change in Atmospheric Carbon Dioxide
Input Data Values
Change in Carbon Dioxide in Atmosphere [Parts per Million]
World Population [billions]

Change in Amount of Carbon Dioxide Emitted into Atmosphere
Calculated Results Values
Carbon Dioxide Emissions [billions of Metric Tonnes]
Estimated Change in World GDP [billions]

Setting the default entry for Change in Carbon Dioxide in Atmosphere to -0.18 parts per million, which is the change in the trailing twelve month average of the year over year change in the concentration of atmospheric carbon dioxide measured at the remote Mauna Loa Observatory from December 2019 through May 2020, we find an estimated decline of roughly $6 billion in World GDP. That's 1.6 times the $3.8 billion decline for the pandemic estimated by the University of Sydney through the third week of the month, which is to say our quick estimate is still very much in the right ballpark for the order of magnitude.

If you want to update the estimate of World GDP lost to the negative economic impact caused by the coronavirus pandemic using our method through the end of June 2020, just change the -0.18 default entry to -0.24 in the tool.

References

National Oceanographic and Atmospheric Administration. Earth System Research Laboratory. Mauna Loa Observatory CO2 Data. [File Transfer Protocol Text File]. Accessed 10 July 2020.

Cederborg, Jenny and Snöbohm, Sara. Is there a relationship between economic growth and carbon dioxide emissions? Semantic Scholar.
[PDF Document]. 2016.

Larsen, K.; Pitt, H.; Larsen, J.; Herndon, W.; Houser, T.; Kolus, H.; Mohan, S.; and Wimberger, E. Taking Stock 2020: The COVID-19 Edition. Rhodium Group. [PDF Document]. 9 July 2020.

Image credit: Photo by Erik Mclean on Unsplash

Labels: , , , ,

About Political Calculations

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations.com

Thanks in advance!

Recent Posts

Stock Charts and News

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button

JavaScript

The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links

Useful Election Data
Charities We Support
Shopping Guides
Recommended Reading
Recently Shopped

Seeking Alpha Certified

Archives
Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.