Economic Impacts of COVID-19, Climate Change, and Antimicrobial Resistance

Abstract

Pandemics, climate change, and antimicrobial resistance (AMR) are three complex challenges that will significantly impact economies in the twenty-first century. The human understanding of the factors driving these challenges and their potential evolution is still evolving. Amidst the prevailing uncertainties, investigating the cost of inaction and the costs and benefits of alternative policy actions to respond to these challenges is vital to formulating policy measures to prevent aggravating the already adverse consequences. This thesis explores how the economic impacts of such unprecedented challenges could be assessed to inform policymaking. Particularly, it explores the economic impacts of COVID-19, climate change, and AMR, which are ongoing challenges to humanity with lasting impacts on the environment and society. Section I of the thesis contains three studies exploring the economic impacts of COVID-19, which brought the world to a standstill, has cost at least seven million lives and reversed decades of progress in human development. The first study illustrates how alternative scenarios of the SARS-CoV-2 outbreak could be assessed within economic models to identify the costs of its potential evolution pathways to provide policymakers with a range of estimates for the cost of inaction. The second study combines the health and economic policy responses to the pandemic that evolved from the outbreak with epidemiological projections for the near future to compare the costs of different scenarios and the importance of collective and coordinated global action. The third study investigates the effectiveness of various policy options to support global economic recovery from the economic downturn caused by the pandemic. Section II of the thesis contains four studies exploring the economic impacts of climate change, which is already creating lasting, catastrophic, and irreversible damage to the environment and society. The first study adopts a bottom-up approach to evaluate the global economic impacts arising from the exposure of a sample of leading individual firms to physical climate risks. The second study investigates how the agriculture and energy sectors, with their strong linkages to the environment, could be affected by physical climate risks and the economic consequences of such exposure. The third study evaluates how physical climate risks could directly affect the financial sector. The fourth study combines the second and third studies with transition risks arising from the responses to climate change to illustrate the range of economic effects to anticipate when transitioning to a low-carbon economy while facing environmental disruptions. Section III of the thesis contains three studies assessing how climate risks and current global demographic trends could interact with AMR and the economic consequences of AMR under alternative scenarios. The first study explores how physical climate risks could affect the acquisition of resistance by critical pathogens to existing medicine. The second study assesses the implications of ongoing demographic trends, including population ageing and urbanization, on AMR. The third study combines the evidence from the first and second studies to design potential evolution pathways of AMR and assess their economic consequences. The study also illustrates the additional economic impacts arising from the responses by the governments and financial markets if AMR minimally develops to the scale of a pandemic similar to COVID-19. Show more