IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v215y2024ics092180092300263x.html
   My bibliography  Save this article

Inconsistent definitions of GDP: Implications for estimates of decoupling

Author

Listed:
  • Semieniuk, Gregor

Abstract

Efforts to assess the possibilities for decoupling economic growth from resource use and negative environmental impacts have examined their historical relationship, with varying and inconclusive results. This paper shows that ambiguities in the historical measurement arising from definitional changes to GDP are sufficiently large to affect the results. I review the history of structural revisions to GDP using the example of the United States, and on international comparisons of purchasing power parity, and compare decoupling results using GDP vintages reported between 1994 and 2021 for most countries. Between vintages, 10–15% of countries switch between relative decoupling and recoupling from energy or materials on decadal intervals, and up to as many countries as decouple absolutely in an older vintage stop or newly start absolutely decoupling in the newer vintage. GDP vintages also affect environmental Kuznets curve results on absolute decoupling in Grossman and Krueger's seminal paper and accelerate the International Energy Agency's annual global decline in energy intensity by up to −0.2 percentage points. Inconsistencies in economic measurement introduce ambiguity into historical decoupling evidence and model projections into the future. To advance debate, rigorous reporting and sharing of data vintage for subsequent comparison and replication are urgently needed.

Suggested Citation

  • Semieniuk, Gregor, 2024. "Inconsistent definitions of GDP: Implications for estimates of decoupling," Ecological Economics, Elsevier, vol. 215(C).
    • Handle: RePEc:eee:ecolec:v:215:y:2024:i:c:s092180092300263x
    DOI: 10.1016/j.ecolecon.2023.108000
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S092180092300263X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecolecon.2023.108000?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Angus Deaton & Paul Schreyer, 2022. "GDP, Wellbeing, and Health: Thoughts on the 2017 Round of the International Comparison Program," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(1), pages 1-15, March.
    2. Robert C. Feenstra & Robert Inklaar & Marcel P. Timmer, 2015. "The Next Generation of the Penn World Table," American Economic Review, American Economic Association, vol. 105(10), pages 3150-3182, October.
    3. Frits Bos, 2006. "The development of the Dutch national accounts as a tool for analysis and policy," Statistica Neerlandica, Netherlands Society for Statistics and Operations Research, vol. 60(2), pages 225-258, May.
    4. Stern, David I., 2004. "The Rise and Fall of the Environmental Kuznets Curve," World Development, Elsevier, vol. 32(8), pages 1419-1439, August.
    5. David I. Stern, 2017. "How accurate are energy intensity projections?," Climatic Change, Springer, vol. 143(3), pages 537-545, August.
    6. Daron Acemoglu & Suresh Naidu & Pascual Restrepo & James A. Robinson, 2019. "Democracy Does Cause Growth," Journal of Political Economy, University of Chicago Press, vol. 127(1), pages 47-100.
    7. Missemer, Antoine & Nadaud, Franck, 2020. "Energy as a factor of production: Historical roots in the American institutionalist context," Energy Economics, Elsevier, vol. 86(C).
    8. Arnold Tukker & Hector Pollitt & Maurits Henkemans, 2020. "Consumption-based carbon accounting: sense and sensibility," Climate Policy, Taylor & Francis Journals, vol. 20(S1), pages 1-13, April.
    9. Kander, Astrid, 2005. "Baumol's disease and dematerialization of the economy," Ecological Economics, Elsevier, vol. 55(1), pages 119-130, October.
    10. Dale W. Jorgenson & J. Steven Landefeld, 2009. "Implementation of a New Architecture for the US National Accounts," American Economic Review, American Economic Association, vol. 99(2), pages 64-68, May.
    11. John W. Kendrick, 1970. "The Historical Development of National-Income Accounts," History of Political Economy, Duke University Press, vol. 2(2), pages 284-315, Fall.
    12. Jason Hickel & Giorgos Kallis, 2020. "Is Green Growth Possible?," New Political Economy, Taylor & Francis Journals, vol. 25(4), pages 469-486, June.
    13. Ruggles, Richard, 1990. "A Note on the Revision of the United Nations System of National Accounts," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 36(4), pages 413-419, December.
    14. Thomas Wiedmann & Manfred Lenzen & Lorenz T. Keyßer & Julia K. Steinberger, 2020. "Scientists’ warning on affluence," Nature Communications, Nature, vol. 11(1), pages 1-10, December.
    15. Gene M. Grossman & Alan B. Krueger, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(2), pages 353-377.
    16. Paul Johnson & Chris Papageorgiou, 2020. "What Remains of Cross-Country Convergence?," Journal of Economic Literature, American Economic Association, vol. 58(1), pages 129-175, March.
    17. Henriques, Sofia Teives & Kander, Astrid, 2010. "The modest environmental relief resulting from the transition to a service economy," Ecological Economics, Elsevier, vol. 70(2), pages 271-282, December.
    18. Carol Corrado & Jonathan Haskel & Javier Miranda & Daniel Sichel, 2021. "Measuring and Accounting for Innovation in the Twenty-First Century," NBER Books, National Bureau of Economic Research, Inc, number corr-2, July.
    19. Robert Eisner & David H. Nebhut, 1981. "An Extended Measure Of Government Product: Preliminary Results For The United States, 1946–76," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 27(1), pages 33-64, March.
    20. Fiona Tregenna, 2009. "Characterising deindustrialisation: An analysis of changes in manufacturing employment and output internationally," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 33(3), pages 433-466, May.
    21. Nick Hanley & Louis Dupuy & Eoin McLaughlin, 2015. "Genuine Savings And Sustainability," Journal of Economic Surveys, Wiley Blackwell, vol. 29(4), pages 779-806, September.
    22. Martin Feldstein, 2017. "Underestimating the Real Growth of GDP, Personal Income, and Productivity," Journal of Economic Perspectives, American Economic Association, vol. 31(2), pages 145-164, Spring.
    23. Richard T. Carson, 2010. "The Environmental Kuznets Curve: Seeking Empirical Regularity and Theoretical Structure," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(1), pages 3-23, Winter.
    24. Utz-Peter Reich, 2001. "National Accounts and Economic value," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-51290-0, September.
    25. Angus Deaton & Bettina Aten, 2017. "Trying to Understand the PPPs in ICP 2011: Why Are the Results So Different?," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(1), pages 243-264, January.
    26. Jacob Assa & Ingrid Harvold Kvangraven, 2021. "Imputing Away the Ladder: Implications of Changes in GDP Measurement for Convergence Debates and the Political Economy of Development," New Political Economy, Taylor & Francis Journals, vol. 26(6), pages 985-1014, November.
    27. Liddle, Brantley & Huntington, Hillard, 2021. "There’s Technology Improvement, but is there Economy-wide Energy Leapfrogging? A Country Panel Analysis," World Development, Elsevier, vol. 140(C).
    28. Kacprzyk, Andrzej & Kuchta, Zbigniew, 2020. "Shining a new light on the environmental Kuznets curve for CO2 emissions," Energy Economics, Elsevier, vol. 87(C).
    29. William T. Harbaugh & Arik Levinson & David Molloy Wilson, 2002. "Reexamining The Empirical Evidence For An Environmental Kuznets Curve," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 541-551, August.
    30. Richard Ruggles, 1990. "A Note On The Revision Of The United Nations System Of National Accounts," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 36(4), pages 413-419, December.
    31. Braithwait, Steven D, 1980. "The Substitution Bias of the Laspeyres Price Index: An Analysis Using Estimated Cost-of-Living Indexes," American Economic Review, American Economic Association, vol. 70(1), pages 64-77, March.
    32. Gregor Semieniuk & Lance Taylor & Armon Rezai & Duncan K. Foley, 2021. "Plausible energy demand patterns in a growing global economy with climate policy," Nature Climate Change, Nature, vol. 11(4), pages 313-318, April.
    33. Daniel Huppmann & Joeri Rogelj & Elmar Kriegler & Volker Krey & Keywan Riahi, 2018. "A new scenario resource for integrated 1.5 °C research," Nature Climate Change, Nature, vol. 8(12), pages 1027-1030, December.
    34. Deepankar Basu & Duncan K. Foley, 2013. "Dynamics of output and employment in the US economy," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 37(5), pages 1077-1106.
    35. Ulrich Witt & Christian Gross, 2020. "The rise of the “service economy” in the second half of the twentieth century and its energetic contingencies," Journal of Evolutionary Economics, Springer, vol. 30(2), pages 231-246, April.
    36. Jayati Ghosh, 2018. "A note on estimating income inequality across countries using PPP exchange rates," The Economic and Labour Relations Review, , vol. 29(1), pages 24-37, March.
    37. Dean Croushore & Tom Stark, 2003. "A Real-Time Data Set for Macroeconomists: Does the Data Vintage Matter?," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 605-617, August.
    38. Brent R. Moulton, 2004. "The system of national accounts for the new economy: What should change?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(2), pages 261-278, June.
    39. Angus Deaton & Alan Heston, 2010. "Understanding PPPs and PPP-Based National Accounts," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(4), pages 1-35, October.
    40. Katherine A. Moos, 2021. "The historical evolution of the cost of social reproduction in the United States, 1959–2012," Review of Social Economy, Taylor & Francis Journals, vol. 79(1), pages 51-75, January.
    41. Barnet Wagman & Nancy Folbre, 1996. "Household services and economic growth in the United States, 1870-1930," Feminist Economics, Taylor & Francis Journals, vol. 2(1), pages 43-66.
    42. Kraan, Oscar & Chappin, Emile & Kramer, Gert Jan & Nikolic, Igor, 2019. "The influence of the energy transition on the significance of key energy metrics," Renewable and Sustainable Energy Reviews, Elsevier, vol. 111(C), pages 215-223.
    43. Philip Hans Franses, 2009. "Why is GDP typically revised upwards?," Statistica Neerlandica, Netherlands Society for Statistics and Operations Research, vol. 63(2), pages 125-130, May.
    44. Sudhir Anand & Paul Segal, 2008. "What Do We Know about Global Income Inequality?," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 57-94, March.
    45. Corné Van Walbeek, 2006. "Official Revisions To South African National Accounts Data: Magnitudes And Implications," South African Journal of Economics, Economic Society of South Africa, vol. 74(4), pages 745-765, December.
    46. Torras, Mariano & Boyce, James K., 1998. "Income, inequality, and pollution: a reassessment of the environmental Kuznets Curve," Ecological Economics, Elsevier, vol. 25(2), pages 147-160, May.
    47. Robert Summers & Alan Heston, 1991. "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950–1988," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 327-368.
    48. Jason Hickel & Stéphane Hallegatte, 2022. "Can we live within environmental limits and still reduce poverty? Degrowth or decoupling?," Development Policy Review, Overseas Development Institute, vol. 40(1), January.
    49. Corrado, Carol & Haskel, Jonathan & Miranda, Javier & Sichel, Daniel (ed.), 2021. "Measuring and Accounting for Innovation in the Twenty-First Century," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226728179, November.
    50. Dinda, Soumyananda, 2004. "Environmental Kuznets Curve Hypothesis: A Survey," Ecological Economics, Elsevier, vol. 49(4), pages 431-455, August.
    51. Marques, Alexandra & Rodrigues, João & Lenzen, Manfred & Domingos, Tiago, 2012. "Income-based environmental responsibility," Ecological Economics, Elsevier, vol. 84(C), pages 57-65.
    52. Arthur A. van Benthem, 2015. "Energy Leapfrogging," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(1), pages 93-132.
    53. Naqvi, Asjad & Zwickl, Klara, 2017. "Fifty shades of green: Revisiting decoupling by economic sectors and air pollutants," Ecological Economics, Elsevier, vol. 133(C), pages 111-126.
    54. Nordhaus, William, 2007. "Alternative measures of output in global economic-environmental models: Purchasing power parity or market exchange rates?," Energy Economics, Elsevier, vol. 29(3), pages 349-372, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xiaosheng Li & Xia Yan & Qingxian An & Ke Chen & Zhen Shen, 2016. "The coordination between China’s economic growth and environmental emission from the Environmental Kuznets Curve viewpoint," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 83(1), pages 233-252, August.
    2. Bimonte, Salvatore & Stabile, Arsenio, 2017. "Land consumption and income in Italy: a case of inverted EKC," Ecological Economics, Elsevier, vol. 131(C), pages 36-43.
    3. Roxana Pincheira & Felipe Zuniga, 2021. "Environmental Kuznets curve bibliographic map: a systematic literature review," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(S1), pages 1931-1956, April.
    4. Anjum, Zeba & Burke, Paul J. & Gerlagh, Reyer & Stern, David I., "undated". "Modeling the Emissions-Income Relationship Using Long-Run Growth Rates," Working Papers 249422, Australian National University, Centre for Climate Economics & Policy.
    5. Lange, Steffen & Pohl, Johanna & Santarius, Tilman, 2020. "Digitalization and energy consumption. Does ICT reduce energy demand?," Ecological Economics, Elsevier, vol. 176(C).
    6. David I. Stern, 2017. "The environmental Kuznets curve after 25 years," Journal of Bioeconomics, Springer, vol. 19(1), pages 7-28, April.
    7. Massimiliano Mazzanti & Roberto Zoboli, 2008. "Waste Generation, Incineration and Landfill Diversion. De-coupling Trends, Socio-Economic Drivers and Policy Effectiveness in the EU," Working Papers 2008.94, Fondazione Eni Enrico Mattei.
    8. Stern, David I., 2014. "The Environmental Kuznets Curve: A Primer," Working Papers 249424, Australian National University, Centre for Climate Economics & Policy.
    9. Pascalau, Razvan & Qirjo, Dhimitri, 2017. "TTIP and the Environmental Kuznets Curve," MPRA Paper 80192, University Library of Munich, Germany.
    10. Mohammad Reza Farzanegan & Gunther Markwardt, 2012. "Pollution, Economic Development and Democracy: Evidence from the MENA countries," MAGKS Papers on Economics 201227, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    11. Tutulmaz, Onur, 2015. "Environmental Kuznets Curve time series application for Turkey: Why controversial results exist for similar models?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 73-81.
    12. Roberto Mosheim, 2013. "A shadow distance function decomposition of the environmental Kuznets curve: comparing the South China Sea and the Caribbean," Journal of Productivity Analysis, Springer, vol. 40(3), pages 457-472, December.
    13. Zhang, C. & Sun, Y. & Hu, R., 2018. "Does urban-rural income inequality increase agricultural fertilizer or pesticide use? A provincial panel data analysis in China," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277033, International Association of Agricultural Economists.
    14. Farzanegan, Mohammad Reza & Markwardt, Gunther, 2018. "Development and pollution in the Middle East and North Africa: Democracy matters," Journal of Policy Modeling, Elsevier, vol. 40(2), pages 350-374.
    15. Fosten, Jack & Morley, Bruce & Taylor, Tim, 2012. "Dynamic misspecification in the environmental Kuznets curve: Evidence from CO2 and SO2 emissions in the United Kingdom," Ecological Economics, Elsevier, vol. 76(C), pages 25-33.
    16. Buehn, Andreas & Farzanegan, Mohammad Reza, 2013. "Hold your breath: A new index of air pollution," Energy Economics, Elsevier, vol. 37(C), pages 104-113.
    17. A. Bühn & M.R. Farzanega, 2011. "Hold Your Breath: A New Index of Air Quality," Working Papers 11-24, Utrecht School of Economics.
    18. Zhang, Qianxue & Liao, Hua & Hao, Yu, 2018. "Does one path fit all? An empirical study on the relationship between energy consumption and economic development for individual Chinese provinces," Energy, Elsevier, vol. 150(C), pages 527-543.
    19. Kaika, Dimitra & Zervas, Efthimios, 2013. "The Environmental Kuznets Curve (EKC) theory—Part A: Concept, causes and the CO2 emissions case," Energy Policy, Elsevier, vol. 62(C), pages 1392-1402.
    20. Carson, Richard T, 2009. "Searching for Empirical Regularity and Theoretical Structure: The Environmental Kuznets Curve," University of California at San Diego, Economics Working Paper Series qt4m6263c2, Department of Economics, UC San Diego.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:215:y:2024:i:c:s092180092300263x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.