Promoting economic and environmental resilience in the post-COVID-19 era through the city and regional on-road fuel sustainability development

How to control the global temperature rise within 1.5 °C in the post-COVID-19 era has attracted attention. Road transport accounts for nearly a quarter of global CO(2) emissions, and the related sulfur dioxide (SO(2)) emissions also trigger air pollution issues in population-intensive cities and areas. Many cities and states have announced a timetable for phasing out urban-based fossil fuel vehicles. By combining a Markov-chain model with a dynamic stochastic general equilibrium (DSGE) model, the impacts of on-road energy structural change led by phasing out fossil fuel vehicles in the road transportation sector are evaluated. The impact of automobile emissions (both CO(2) and SO(2)) on the environment is evaluated, taking into consideration of variation between cities, regions, and countries. Two other major driving forces in addition to CO(2) emissions reduction in promoting fossil fuel vehicles’ transition toward net-zero carbon are identified and analyzed with multiple different indicators. Under the framework of the DSGE model, climate policy instruments’ effects on economic development, energy consumption, and their link to economic and environmental resilience are evaluated under exogenous shocks as well.