IDEAS home Printed from https://ideas.repec.org/a/jfr/rwe111/v5y2014i2p74-92.html
   My bibliography  Save this article

The Economic Value of Environmental Capital Inputs Used to Produce the Gross Domestic Product in Ghana, 1993 to 2012

Author

Listed:
  • Kwabena Asomanin Anaman
  • Felix Agyei-Sasu

Abstract

Ghana has been one of the fastest growing countries in the world over the last decade driven by exports of oil from newly-discovered offshore oil fields, the export of its traditional commodities of cocoa, gold and other extractive minerals, construction, and the expansion of services related to banking, information and communication technologies, and tourism. Measured by the change in real gross domestic product (GDP), the economy grew at a pace of 7.5% over the period from 2004 to 2013 and 8.6% from 2009 to 2013, and was among the top 15 performers in the world. The Ghanaian economy was formally classified as lower-middle-income in 2010 with a per capita income of over 1,300 United States dollars. Our study focuses on measuring the values of labour and capital inputs used to produce the goods and services incorporated in the GDP. We acknowledge the existence of two types of capital inputs used to produce final goods and services. These are (1) human-made or manufactured capital such as machinery and equipment and (2) environmental capital items such as proven oil and gas reserves, mineral deposits, forest and water resources that are required to produce final goods and services in the economy. We estimated the size of environmental or natural capital stock used to produce the GDP over the twenty-year period, 1993 to 2012 assuming that the economy as a whole exhibited a constant returns to scale feature. The results indicate that over the period, 1993 to 2012, the average share attributed to labour in the production of GDP was about 45%. Human-made capital inputs contributed on average about 19% of GDP. The remaining share of 36% was the estimated value of environmental capital inputs used to produce GDP. We also established that the aggregate environmental depreciation was significantly related to GDP in a positive log-linear fashion while its relationship to real interest rate was negative but not statistically significant.

Suggested Citation

  • Kwabena Asomanin Anaman & Felix Agyei-Sasu, 2014. "The Economic Value of Environmental Capital Inputs Used to Produce the Gross Domestic Product in Ghana, 1993 to 2012," Research in World Economy, Research in World Economy, Sciedu Press, vol. 5(2), pages 74-92, September.
    • Handle: RePEc:jfr:rwe111:v:5:y:2014:i:2:p:74-92
    as

    Download full text from publisher

    File URL: http://www.sciedu.ca/journal/index.php/rwe/article/view/5260/3091
    Download Restriction: no
    File URL: http://www.sciedu.ca/journal/index.php/rwe/article/view/5260
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Thampapillai, Dodo J & Uhlin, Hans-Erik, 1997. "Environmental Capital and Sustainable Income: Basic Concepts and Empirical Tests," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 21(3), pages 379-394, May.
    2. Thampapillai, Dodo & Hanf, Claus-H., 2000. "The Internalisation of Environmental Capital Stocks into an Aggregate Cobb-Douglas Function," Economic Analysis and Policy, Elsevier, vol. 30(2), pages 209-215, September.
    3. David E. Bloom & Jeffrey D. Sachs, 1998. "Geography, Demography, and Economic Growth in Africa," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 207-296.
    4. Robert M. Solow, 1974. "The Economics of Resources or the Resources of Economics," Palgrave Macmillan Books, in: Chennat Gopalakrishnan (ed.), Classic Papers in Natural Resource Economics, chapter 12, pages 257-276, Palgrave Macmillan.
    5. John Hartwick, 1977. "Intergenerational Equity and the Investment of Rents from Exhaustible Resources in a Two Sector Model," Working Paper 281, Economics Department, Queen's University.
    6. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-974, December.
    7. Kwabena Asomanin Anaman & Charity Osei-Amponsah, 2007. "Analysis of the causality links between the growth of the construction industry and the growth of the macro-economy in Ghana," Construction Management and Economics, Taylor & Francis Journals, vol. 25(9), pages 951-961.
    8. Hartwick, John M., 1978. "Investing returns from depleting renewable resource stocks and intergenerational equity," Economics Letters, Elsevier, vol. 1(1), pages 85-88.
    9. Masters, William A & McMillan, Margaret S, 2001. "Climate and Scale in Economic Growth," Journal of Economic Growth, Springer, vol. 6(3), pages 167-186, September.
    10. R. M. Solow, 1974. "Intergenerational Equity and Exhaustible Resources," Review of Economic Studies, Oxford University Press, vol. 41(5), pages 29-45.
    11. Harold Hotelling, 1931. "The Economics of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 39, pages 137-137.
    12. Solow, Robert, 1993. "An almost practical step toward sustainability," Resources Policy, Elsevier, vol. 19(3), pages 162-172, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kwabena Asomanin Anaman & Gbensuglo Alidu Bukari, 2019. "Political Economy Analysis of the Macroeconomic Impact of National Elections in Ghana During the Fourth Republican Era, 1992 to 2016," Applied Economics and Finance, Redfame publishing, vol. 6(3), pages 28-44, May.
    2. Mohammed Muniru Abubakari & Kwabena Asomanin Anaman & Ama Asantewah Ahene-Codjoe, 2022. "Urbanization and Arable Land Use in Northern Ghana: A Case Study of the Sagnarigu Municipality in the Greater Tamale Area," Applied Economics and Finance, Redfame publishing, vol. 9(1), pages 68-84, December.
    3. Kwabena Asomanin Anaman & Gbensuglo Alidu Bukari, 2019. "Political Economy Analysis of Voter Participation and Choices in National Elections in Ghana¡¯s Fourth Republican Era," Research in World Economy, Research in World Economy, Sciedu Press, vol. 10(3), pages 174-198, December.
    4. Kwabena Asomanin Anaman & Gbensuglo Alidu Bukari, 2021. "Voter Turnouts in Presidential Elections in Ghana: A Political Economy Analysis Using District-Level Data," Applied Economics and Finance, Redfame publishing, vol. 8(1), pages 13-31, January.

    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. Toman, Michael & Pezzey, John C., 2002. "The Economics of Sustainability: A Review of Journal Articles," RFF Working Paper Series dp-02-03, Resources for the Future.
    2. Daniele Schilirò, 2019. "Sustainability, Innovation, and Efficiency: A Key Relationship," Palgrave Studies in Impact Finance, in: Magdalena Ziolo & Bruno S. Sergi (ed.), Financing Sustainable Development, chapter 0, pages 83-102, Palgrave Macmillan.
    3. Mircea Saveanu, 2014. "Sustainability as a Resource Distribution Constraint," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 10(2), pages 139-151, April.
    4. Martinet, Vincent, 2007. "A step beside the maximin path: Can we sustain the economy by following Hartwick's investment rule?," Ecological Economics, Elsevier, vol. 64(1), pages 103-108, October.
    5. Vincent Martinet, 2007. "Maximizing minimal rights for sustainability: a viability approach," Working Papers hal-04139217, HAL.
    6. Adrian Boos, 2015. "Genuine Savings as an Indicator for “Weak” Sustainability: Critical Survey and Possible Ways forward in Practical Measuring," Sustainability, MDPI, vol. 7(4), pages 1-37, April.
    7. Jean Bonnet & Eva Coll-Martinez & François Raulin & Patricia Renou-Maissant, 2019. "Typology of sustainable development in Normandy: An appraisal at the intermunicipal level," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 2019-05, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    8. Manel Kamoun & Ines Abdelkafi & Abdelfetah Ghorbel, 2019. "The Impact of Renewable Energy on Sustainable Growth: Evidence from a Panel of OECD Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(1), pages 221-237, March.
    9. Pezzey, John C.V., 2001. "Optimality, Hartwick’s Rule, and Instruments of Sustainability Policy and Environmental Policy," 2001 Conference (45th), January 23-25, 2001, Adelaide, Australia 125833, Australian Agricultural and Resource Economics Society.
    10. Smith, James L., 2012. "On the portents of peak oil (and other indicators of resource scarcity)," Energy Policy, Elsevier, vol. 44(C), pages 68-78.
    11. Manel Kamoun & Ines Abdelkafi & Abdelfetah Ghorbel, 2020. "Does Renewable Energy Technologies and Poverty Affect the Sustainable Growth in Emerging Countries?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(3), pages 865-887, September.
    12. Mircea Sˇveanu, 2014. "Energy and the Economics of Sustainability. The Entropy Paradox," Management of Sustainable Development, Sciendo, vol. 6(1), pages 1-5, August.
    13. Hart, Rob, 2016. "Non-renewable resources in the long run," Journal of Economic Dynamics and Control, Elsevier, vol. 71(C), pages 1-20.
    14. Perrings, Charles, 2014. "Environment and development economics 20 years on," Environment and Development Economics, Cambridge University Press, vol. 19(3), pages 333-366, June.
    15. David I. Stern, 2010. "The Role of Energy in Economic Growth," CCEP Working Papers 0310, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    16. Humberto Llavador & John E. Roemer & Joaquim Silvestre, 2013. "Should we sustain? And if so, sustain what? Consumption or the quality of life?," Chapters, in: Roger Fouquet (ed.), Handbook on Energy and Climate Change, chapter 30, pages 639-665, Edward Elgar Publishing.
    17. Jean Bonnet & Eva Coll-Martinez & Patricia Renou-Maissant, 2019. "Sustainable development. A Comparative Analysis of the Performance of French departments," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 2019-06, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    18. Antoci, Angelo & Borghesi, Simone & Galeotti, Marcello & Sodini, Mauro, 2021. "Living in an uncertain world: Environment substitution, local and global indeterminacy," Journal of Economic Dynamics and Control, Elsevier, vol. 126(C).
    19. Hou, Zheng & Roseta-Palma, Catarina & Ramalho, Joaquim José dos Santos, 2021. "Does directed technological change favor energy? Firm-level evidence from Portugal," Energy Economics, Elsevier, vol. 98(C).
    20. Andre, Francisco J. & Cerda, Emilio, 2005. "On natural resource substitution," Resources Policy, Elsevier, vol. 30(4), pages 233-246, December.

    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:jfr:rwe111:v:5:y:2014:i:2:p:74-92. 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: Gina Perry (email available below). General contact details of provider: http://rwe.sciedupress.com .

    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.