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Total Factor Productivity Growth and the Environment: A Case for Green Growth Accounting

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Author Info

  • Vangelis Tzouvelekas

    ()
    (Department of Economics, University of Crete, Greece)

  • Dimitra Vouvaki

    (Department of Economics, University of Crete, Greece)

  • Anastasios Xepapadeas

    ()
    (Department of Economics, University of Crete, Greece)

Abstract

We examine whether the use of the environment, proxied by CO2 emissions, as a factor of production contributes, in addition to con- ventional factors of production to output growth, and thus it should be accounted for in total factor productivity growth (TFPG) mea- surement and deducted from the ‘residual’. A theoretical framework of growth accounting methodology with environment as a factor of production which is unpaid in the absence of environmental policy is developed. Using data from a panel of 23 OECD countries, we show that emissions’growth have a statistically signi…cant contribution to the growth of output, that emission augmenting technical change is present along with labor augmenting technical change, and that part of output growth which is traditionally attributed to technical change should be attributed to the use of the environment as a not fully com- pensated factor of production. Our results point towards the need for developing a concept of Green Growth Accounting.

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Bibliographic Info

Paper provided by University of Crete, Department of Economics in its series Working Papers with number 0617.

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Length: 37 pages
Date of creation: 16 Dec 2006
Date of revision:
Handle: RePEc:crt:wpaper:0617

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Keywords: Solow Residual; Total Factor Productivity Growth; Growth; Environment; Green Growth Accounting.;

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References

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Cited by:
  1. Everett, Tim & Ishwaran, Mallika & Ansaloni, Gian Paolo & Rubin, Alex, 2010. "Economic growth and the environment," MPRA Paper 23585, University Library of Munich, Germany.
  2. Partha Dasgupta, 2009. "The Welfare Economic Theory of Green National Accounts," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 42(1), pages 3-38, January.
  3. Anastasios Xeapapadeas & Dimitra Vouvaki, 2009. "Total Factor Productivity Growth when Factors of Production Generate Environmental Externalities," Working Papers 2009.20, Fondazione Eni Enrico Mattei.
  4. Pantelis Kalaitzidakis. & Theofanis P. Mamuneas. & Thanasis Stengos., 2008. "The Contribution of Greenhouse Pollution to Productivity Growth," Working Papers 0802, University of Guelph, Department of Economics and Finance.
  5. Neophyta Empora & Theofanis Mamuneas, 2011. "The Effect of Emissions on U.S. State Total Factor Productivity Growth," Review of Economic Analysis, Rimini Centre for Economic Analysis, vol. 3(2), pages 149-172, October.
  6. Shiyi Chen, 2009. "Engine or drag: Can high energy consumption and CO 2 emission drive the sustainable development of Chinese industry?," Frontiers of Economics in China, Springer, vol. 4(4), pages 548-571, December.
  7. Karl-Göran Mäler, 2008. "Sustainable Development and Resilience in Ecosystems," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 39(1), pages 17-24, January.
  8. Karl-Göran Mäler, 2007. "Wealth and sustainable development: the role of David Pearce," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 37(1), pages 63-75, May.

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