Accounting for Natural Capital in Productivity of the Mining and Oil and Gas Sector

Weimin Wang and Patrick Adams

Analytical Studies Branch Research Paper Series from Statistics Canada, Analytical Studies Branch

Abstract:

This paper presents a growth accounting framework in which subsoil mineral and energy resources are recognized as natural capital input into the production process. It is the first study of its kind in Canada. Firstly, the income attributable to subsoil resources, or resource rent, is estimated as a surplus value after all extraction costs and normal returns on produced capital have been accounted for. The value of a resource reserve is then estimated as the present value of the future resource rents generated from the efficient extraction of the reserve. Lastly, with extraction as the observed service flows of natural capital, multifactor productivity (MFP) growth and the other sources of economic growth can be reassessed by updating the income shares of all inputs, and then, by estimating the contribution to growth coming from changes in the value of natural capital input. This framework is then applied to the Canadian oil and gas extraction sector.

Keywords: Crude oil and natural gas; Economic accounts; Energy; Productivity accounts (search for similar items in EconPapers)
Date: 2015-12-14
New Economics Papers: this item is included in nep-acc, nep-eff and nep-ene
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Citations: View citations in EconPapers (1)

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Related works:
Chapter: Accounting for Natural Capital in Productivity of the Mining and Oil and Gas Sector (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:stc:stcp3e:2015372e

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