Quantifying consumption-based environmental productivity from "Energy-Environment Footprints"

Addressing the challenge of climate change through accounting is crucial for sustainable development, which is influenced by factors such as productivity growth, technical change, efficiency change, and environmental accounting. However, previous studies have predominantly focused on production-based growth accounting, neglecting the significant impact of consumption on growth accounting levels. In response, this study introduces a synthetic index termed as consumption-based environmental productivity. This innovative index utilizes the Luenberger Productivity Index (LPI) and the Logarithmic Mean Divisia Index (LMDI) models, relying on a Multiregional Input-output (MRIO) footprint instead of direct emissions. Our empirical research found that from 2000 to 2014, certain economies bore a considerable portion of undesirable emissions imported from abroad. This supports the argument that the footprint approach is a valid alternative to direct emissions assessments. Further analysis revealed an overall growth trend in environmental productivity (EP) of 0.79 %. Efficiency change (EC) contributed negatively (-0.35 %), while technical progress (TP) positively influenced EP by 1.14 %. Additionally, our study points out that reductions in NOX and SO2 emissions were primarily due to energy intensity improvements. Conversely, CO2 emissions were driven by individual production factors and economic growth. These results underscore that establishing clear responsibility for emissions is the foundational step in implementing emission reduction policies in an equitable manner. Concurrently, it is crucial to improve the efficiency of energy consumption and mitigate undesirable emissions to significantly enhance productivity, especially for developing economies, policies should prioritize the development of energy cleanliness and energy efficiency. Furthermore, it is imperative for all economies to refrain from pursuing unnecessary economic growth that could lead to excessive emissions.