Please use this identifier to cite or link to this item: https://hdl.handle.net/1959.11/5394
Title: Ominous portent of the omitted variable: the urgent need to understand energy's role in productivity growth
Contributor(s): McNeill, Judith  (author)
Publication Date: 2009
Handle Link: https://hdl.handle.net/1959.11/5394
Abstract: The consequences of a global economic recovery that does not reduce carbon dependency are profoundly concerning, yet some economic recovery agendas have unsettling overtones of 'business-as-usual'. In Australia, for example, restoring 'productivity growth' is firmly on the agenda. 'Productivity growth' is commonly understood to mean either higher labour productivity - an increase in value-added (or GDP) per hours worked by labour - or an increase in 'total factor productivity', otherwise known as technological change. Either way, as ecological economists have shown, the remarkable pace of technological change and the impressive increases in labour productivity achieved over the last century have markedly raised the level of material and energy throughput into the economy - yet it is this 'resource productivity' that must be improved in order to achieve 'green mileage' and greater sustainability. The question arises then: can an economy pursue a recovery based on increases in labour productivity, total factor productivity and resource productivity simultaneously? The fact that the question is not being asked in policy circles appears to be because natural resources, and energy in particular, are often omitted altogether from the aggregate production functions used to measure productivity increases, creating somewhat of a 'blind spot'. Even if energy is included as a factor of production, methodology consistent with the assumptions of the neoclassical theory underpinning conventional productivity measurement undervalues it by weighting it at its GDP 'factor cost share'. Drawing on ecological economics research, this paper puts the case as to why energy should be included as a factor of production; why weighting energy by its 'factor cost share' when it is included, is wrong; how this commits a type of 'water versus diamonds' valuation error; and why this matters so much at this point in time.
Publication Type: Conference Publication
Conference Name: Green Mileage in the Global Meltdown: An Ecological Economics Way Forward - Conference of the Australia and New Zealand Society for Ecological Economics (ANZSEE), Darwin, Australia, 27th - 30th October, 2009
Conference Details: Green Mileage in the Global Meltdown: An Ecological Economics Way Forward - Conference of the Australia and New Zealand Society for Ecological Economics (ANZSEE), Darwin, Australia, 27th - 30th October, 2009
Source of Publication: Green Mileage in the Global Meltdown: An Ecological Economics Way Forward. Proceedings of the Conference of the Australia New Zealand Society for Ecological Economics
Publisher: Australia and New Zealand Society for Ecological Economics (ANZSEE)
Place of Publication: Darwin, Australia
Field of Research (FOR): 149902 Ecological Economics
Socio-Economic Outcome Codes: 960601 Economic Incentives for Environmental Protection
Peer Reviewed: Yes
HERDC Category Description: E1 Refereed Scholarly Conference Publication
Other Links: http://anzsee.org/?page_id=246
http://www.ecoeco.org/anzsee09/cd_view_detail.php?id=751
Statistics to Oct 2018: Visitors: 219
Views: 222
Downloads: 0
Appears in Collections:Conference Publication
School of Psychology

Files in This Item:
2 files
File Description SizeFormat 
Show full item record

Page view(s)

114
checked on May 3, 2019
Google Media

Google ScholarTM

Check


Items in Research UNE are protected by copyright, with all rights reserved, unless otherwise indicated.