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Global economic sustainability indicator: analysis and policy options for the Copenhagen process




Summary: The traditional discussion about CO2 emissions and greenhouse gases as a source of global warming has been rather static, namely in the sense that innovation dynamics have not been considered much. Given the global nature of the climate problem, it is natural to develop a more dynamic Schumpeterian perspective and to emphasize a broader international analysis, which takes innovation dynamics and green international competitiveness into account: We discuss key issues of developing a consistent global sustainability indicator, which should cover the crucial dimensions of sustainability in a simple and straightforward way. The basic elements presented here concern genuine savings rates – covering not only depreciations on capital, but on the natural capital as well -, the international competitiveness of the respective country in the field of environmental ("green") goods and the share of renewable energy generation. International benchmarking can thus be encouraged and opportunities emphasized - an approach developed here. This new EIIW-vita Global Sustainability Indicator is consistent with the recent OECD requirements on composite indicators and thus, we suggest new options for policymakers. The US and Indonesia have suffered from a decline in their performance in the period 2000-07; Germany has improved its performance as judged by the new composite indicator whose weights are determined from factor analysis. The countries covered stand for roughly 91% of world GDP, 94% of global exports, 82% of global CO2 emissions and 68% of the population.
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Suggested Citation

  • Paul Welfens & Jens Perret & Deniz Erdem, 2010. "Global economic sustainability indicator: analysis and policy options for the Copenhagen process," International Economics and Economic Policy, Springer, vol. 7(2), pages 153-185, August.
  • Handle: RePEc:kap:iecepo:v:7:y:2010:i:2:p:153-185 DOI: 10.1007/s10368-010-0165-9

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    References listed on IDEAS

    1. Betsey Stevenson & Justin Wolfers, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 1-102.
    2. Gernot Klepper & Sonja Peterson, 2006. "Emissions Trading, CDM, JI, and More: The Climate Strategy of the EU," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 1-26.
    3. Walker, William, 1986. "Information technology and energy supply," Energy Policy, Elsevier, vol. 14(6), pages 466-488, December.
    4. Wolfgang Keller, 2004. "International Technology Diffusion," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 752-782, September.
    5. Paul J.J. Welfens, 2009. "Explaining oil price dynamics," EIIW Discussion paper disbei169, Universitätsbibliothek Wuppertal, University Library.
    6. John L. Enos, 1962. "Invention and Innovation in the Petroleum Refining Industry," NBER Chapters,in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 299-322 National Bureau of Economic Research, Inc.
    7. William D. Nordhaus, 2006. "The "Stern Review" on the Economics of Climate Change," NBER Working Papers 12741, National Bureau of Economic Research, Inc.
    8. Lucas Bretschger, 2010. "Sustainability economics, resource efficiency, and the Green New Deal," International Economics and Economic Policy, Springer, vol. 7(2), pages 187-202, August.
    9. Betina Dimaranan & Elena Ianchovichina & Will Martin, 2009. "How will growth in China and India affect the world economy?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(3), pages 551-571, October.
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    Cited by:

    1. Paul Welfens, 2014. "Issues of modern macroeconomics: new post-crisis perspectives on the world economy," International Economics and Economic Policy, Springer, vol. 11(4), pages 481-527, December.
    2. Vladimir Udalov & Paul J.J. Welfens, 2017. "Digital and Competing Information Sources: Impact on Environmental Concern und Prospects for Cooperation," EIIW Discussion paper disbei233, Universitätsbibliothek Wuppertal, University Library.
    3. Paul Welfens & Christian Lutz, 2012. "Green ICT dynamics: key issues and findings for Germany," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 24(2), pages 155-163, June.
    4. repec:rss:jnljse:v2i1p4 is not listed on IDEAS
    5. Paul J.J. Welfens, 2011. "Atomstromkosten und -risiken: Haftpflichtfragen und Optionen rationaler Wirtschaftspolitik," EIIW Discussion paper disbei190, Universitätsbibliothek Wuppertal, University Library.
    6. Udalov, Vladimir & Welfens, Paul J. J., 2017. "Digital and Competing Information Sources: Impact on Environmental Concern and Prospects for Cooperation," IZA Discussion Papers 10684, Institute for the Study of Labor (IZA).
    7. Paul J.J Welfens, 2010. "New Open Economy Policy Perspectives: Modified Golden Rule and Hybrid Welfare," EIIW Discussion paper disbei179, Universitätsbibliothek Wuppertal, University Library.
    8. repec:rss:jnljms:v3i8p8 is not listed on IDEAS

    More about this item


    Global warming; Innovation; Sustainability; International Economics; Factor analysis;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries


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