The COVID-19 lockdown in India: Impacts on the economy and the power sector

Abstract

This paper demonstrates the use of a linear Input-Output (IO) model to estimate the economic losses in India due to COVID-19. The results show that depending on the duration of the lockdown, the Indian economy is likely to face a loss of about 10–31% of its GDP. This method can be applied to assess economic losses for other regions also. The paper also discusses the impacts of COVID-19 on the demand and supply of electricity and CO₂ emissions from the power sector. The results show that daily supply from coal-based power plants has reduced by 26% during the lockdown resulting in a possible emissions reduction of about 15–65 MtCO₂ depending on the lockdown duration. The cost of avoided carbon is approximately 186–264 $/tCO2, much higher than the $7–12/tCO2 currently being paid by consumers in India indicating the difficulty of achieving emissions reductions through restructuring economic activity as often advocated.