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GDP-growth and the environmental economy


Branko Milanovic gets philosophical about productive and unproductive labour. Is a dentist productive? A soldier? A lobbyist? Seen from the angle of national accounting such questions, important as they are, are beside the point as these accounts aim to gauge total income and all labour which yields an income (wages, profits, whatever) is considered to be productive. As it enables people to gain an income…  People work for the money, even when they are protecting the environment. Which does  not mean that the composition of production is not important. Of course it is. And according to Eurostat more and more people work to prevent even more environmental degradation (graph). Think: solar cells, wasste water treatment and comparable activities. This adds to GDP and income. And to a better (or at least: less bad) environment. The point: we are measuring this, using the national accounts (among other statistics). Which is a good thing. Aside: Eurostat defines these activities as:

The environmental goods and services account comprises two broad groups of activities and products:

  • environmental protection — activities whose primary purpose is the prevention, reduction and elimination of pollution and any other degradation of the environment;
  • resource management — activities whose primary purpose is preserving and maintaining the stock of natural resources and hence safeguarding against depletion.

Specialised classifications exist for environmental protection activities (CEPA) and resource management activities (CReMA).”




  1. Jamie Morgan
    May 31, 2016 at 2:13 pm

    What matters in the end is what is actually done:


    Best, Jamie

  2. graccibros
    May 31, 2016 at 2:16 pm

    It seems that it is easier to quantify the new environmentally oriented jobs and their value than to create that all important baseline of nature’s processes and what they contribute to the economy. We all applaud the progress Europe has made in alternative energy and urban green living, but the questions raised by Gus Speth and many others remain: the vector for overall world economic activity upon the sum total of natural systems is negative, natural systems being overwhelmed by intensity, volume and sheer numbers. Richard Smith’s book “Green Capitalism: The God That Failed” takes us into the ugly reality of the processes, from extraction, to processing, production, transportation and finally disposal, and disposes of our illusions along the way. A lot of the environmental discussion in the West tends to downplay or completely ignore the early stages of the life cycle of what it consumes, and Smith likes to tweak our ignorance – perhaps willful – about that distant “corner” of environmental realities.
    It’s hard to say whether it’s his left political conclusions or the brutal realism of the analysis that is preventing a closer look at his work. I’m trying to imagine William Nordhaus or Alan Blinder digesting what he has written, since they have obvious distaste for Naomi Klien’s work, and Smith in turn takes her to task for lack of systematic thought about the political economy and following her formulations to more precise recommendations.

    I’ve read Smith for the rigor of his analysis, shaking my head at the same time in realization of where the USA is on the environmental-economic spectrum of possibilities, benchmarked by the tiny amount of time this policy area has gotten in the Presidential primaries so far.

  3. May 31, 2016 at 2:26 pm

    Considering gainful employment as defining productive appears to neuter the idea of productive. Here is a hinge to open examination of economic growth as a positive or negative by associating flux or phase vectors with non-equilibrium steady states.

  4. June 1, 2016 at 3:08 am

    Take a tour of Presidential speeches on the environment since Richard Nixon. They all sound the same alarms. Humans are fouling their own nest; destroying the planet with their mining, drilling, internal combustion engines, pollution, and at least for the last few Presidents their addiction to oil (George W. Bush’s words, not mine). Yet the US Senate has not ratified any major environmental treaty and Presidents before Obama did not a hands on approach to addressing environmental problems. When Richard Nixon asked his advisers whether or not he should sign the EPA legislation the response (that pleased Nixon) was that the environmental work described in the bill would be completed by private companies. Lots of new opportunities for “environmental economic growth” – a bigger private sector of environmental companies. Yet nowhere in this process was the question asked if all this new “private profit” actually was the best way to deal with environmental problems. This is the curse of neoliberal economics – organize private companies and markets — supposedly the best approach always for solving any problem — and just let these fix the problem, environmental or otherwise. Sounds insane to me. But then I still think the electric cooperative model is the best option for all electric services and that DOE and the US national laboratories should lead the environmental efforts of the US. I guess I’m not very sophisticated or just not sufficiently greedy, or both.

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