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Green Growth and the Efficient Use of Natural Resources

Research and Teaching Output of the MIT Community

Show simple item record Reilly, John 2012-06-14T18:37:13Z 2012-06-14T18:37:13Z 2012-06-14
dc.description en_US
dc.description.abstract The relatively new concept of "green growth" can be fruitfully connected to concepts and theories in neoclassical economics including market externalities, Ricardian and Hotelling rents, and policies that would correct externalities such as Pigovian taxes or a cap and trade system set to achieve emissions reductions consistent with cost benefit assessment. Partial equilibrium concepts have been extended to general equilibrium models, including their realization in relatively detailed empirical models that faithfully adhere to theoretical concepts of neoclassical economics. With such models we are then able to see how resource depletion and environmental degradation are affecting the economy, and how efforts to reduce the impact of these environmental and resource constraints could improve economic growth and performance. The foundation for traditional computable general equilibrium models are the National Income and Product Accounts (NIPAs), input-output (I-O) tables, and expanded Social Accounting Matrices (SAMs). The basis for extending these to include environmental and resource assets and goods are so called Integrated Economic and Environmental Social Accounts (IEESAs). While environmental effects are often considered to be "non-market," many of the impacts of environment are often reflected in market accounts through damages that might include, for example, less labor (due to environment related health problems), reduced productivity of agroecosystems, or damage to infrastructure and other produced assets. The challenge is to make the environmental connection explicit so as to provide a guide to where changes in policies could provide benefit. However, some damages do not enter the accounts at all, and mainly this is because household labor and leisure time are generally not valued in traditional accounts. Hence the cost of illness in terms of reduced ability to contribute to household activities would be missed in the standard accounts. While the theoretical structure for expanding the accounts has been laid out in various reviews, the empirical challenge of doing so is substantial. Careful attention to expanding NIPA accounts, making it a regular part of government statistical agencies’ efforts would improve the foundation for analysis of potential "green growth" policies and measures. en_US
dc.description.sponsorship The Joint Program on the Science and Policy of Global Change is funded by a number of federal agencies and a consortium of 40 industrial and foundation sponsors. (For the complete list see en_US
dc.language.iso en_US en_US
dc.publisher MIT Joint Program on the Science and Policy of Global Change en_US
dc.relation.ispartofseries Joint Program Report Series;221
dc.rights An error occurred on the license name. en
dc.rights.uri An error occurred getting the license - uri. en
dc.title Green Growth and the Efficient Use of Natural Resources en_US
dc.type Technical Report en_US
dc.identifier.citation JP Report 221 en_US

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