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Analyzing the Tradeoff between the Economic and Environmental Performance: the Case of Chinese Manufacturing Sector

Zhiyang Shen (), Michael Vardanyan, Tomas Baležentis () and Jianlin Wang ()
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Jianlin Wang: Dongbei University of Finance and Economics, Dalian, China

No 2020-EQM-05, Working Papers from IESEG School of Management

Abstract: The so-called by-production approach, introduced by Murty and Russell (2002) and Murty et al. (2012), has provided researchers with an improved methodology for approximating polluting production technologies. However, since the original by-production model does not impose any relationship between its economic and environmental sub-technologies, it is not capable of addressing the potential tradeoff between the economic and environmental performance. Although this link has been recently proposed in the extensions to the original by-production approach, the tradeoff framework remains ambiguous with respect to the weights to be assigned to the economic and environmental sub-objectives. This paper proposes a novel approach for estimating the green productivity growth in the Chinese manufacturing sector based on the scenario analysis simulating policy preferences. Our model allows us to measure the tradeoff between faster economic growth and better environmental protection, providing policy-makers with insights on how to steer the Chinese industry towards a more environmentally friendly development path in the future.

Keywords: : Tradeoff analysis; By-production technology; Carbon emissions; Green productivity; Chinese manufacturing. (search for similar items in EconPapers)
JEL-codes: O2 O47 Q5 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2020-06
New Economics Papers: this item is included in nep-cna, nep-eff, nep-ene and nep-env
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