Question

How does COVID-19 pandemic affect CO2 emissions? Use appropriate model and diagram to explain it. (Hint: Positive externality)

In the short run, do you think the benefits of the cleaner atmosphere is important?

Answer 1

During the lockdown period due to pandemic COVID-19, all factories were shut down (reduced polluction through chimneys), people were not allowed to move out of their house (reduced pollution from vehicles), there was no pollution from other mode of transportation too such as airplane and ship. All these factors resulted in drastic fall in CO2 emissions. Many people called it that this is way of our nature to heal herself.

Due to reduction in CO2 and cleaner environment, our earth is much years younger now which posed positive externality to everyone's health. Positive externality shifted marginal private benefit (MPB) to its right to marginal social benefit (MSB) while supply remains the same which resulted in rise in output level from private efficient level to socially efficient level.

In the short run, cleaner atmosphere is important because situation was very bad in terms of air pollution and there hazardous effects while in long run situation would be same as before COVID-19.