Evaluation of Sustainable Economic and Environmental Development Evidence From OECD Countries

Evaluation of Sustainable Economic and Environmental Development Evidence From OECD Countries

Jingyu Zhou, Xingyu Xu, Ruochen Jiang, Jinyang Cai
Copyright: © 2022 |Pages: 18
DOI: 10.4018/JGIM.298665
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Abstract

This study analyzes the economic and environmental performance of OECD countries over 2000–2019. A by-production approach is applied and the efficiency score is decomposed into its economic and environmental components. Unlike previous studies, we apply a refined model that allows for the correct modeling of by-production technology. The refined model can provide clear economic illustrations for balancing economic growth and environmental protection. The results indicate that environmental inefficiency is higher than the potential economic improvement. The environmental efficiency of OECD countries is improving, while economic performance is worsening over time. Therefore, instead of highly polluting energy, clean energy should be used to build a low-carbon economy. Worldwide, carbon-emitting countries and developed countries should shoulder their responsibilities to reduce carbon emissions and provide emission reduction funds for developing countries, while simultaneously sharing the green production technologies needed to reduce emissions.
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Introduction

The conflict between economic growth and environmental protection is a permanent issue and has been the subject of heated debate. In early years, the economic prosperity of many countries was based on the cost of sacrificing environmental resources (Xing, 2021). The “London smog incident” was a typical case. The British Industrial Revolution drove rapid economic development, however, the exhaust gas caused by the large amount of coal burning enveloped London in smog and paralyzed traffic. Recently, the public began to pay attention to balancing the economy and environment. Objectively, economic development and environmental protection are inseparable. One important factor is the support of abundant natural resources to realize sustainable development. In addition, advanced technology provided by a sustained economy is crucial to rational development and environmental utilization. Sharma (2020) analyzed how economic development influences the sustainability of the environment and concluded that the development of the financial sector, use of unclean energy, and trade creation increase carbon dioxide emissions. In this context, environmental and climate issues have increasingly become important factors affecting economic development and policymaking, and have attracted wide attention from the international community.

At present, the green development model aiming at efficiency, harmony, and sustainability has become an important trend. Under green development, with the constraint of ecological carrying capacity, environmental protection is recognized as a fundamental way to achieve sustainable development. With the ability to solve the contradiction between the two, green development has received increasing attention from policymakers (UNEP, 2009, 2011), who believe that solving the existing conflict is a significant approach Jänicke, 2012; Isenhour & Feng, 2014" Specifically, to solve problems, governments must invest in technology, science, and other aspects to make the economy cleaner (Jänicke, 2012; Song et al., 2022). However, no country has all the technological, scientific, financial, and other resources needed to achieve green development, and it is impossible to achieve green and sustainable economic growth alone. Therefore, countries globally urgently need to strengthen exchanges and cooperation to overcome the difficulties of climate problems and environmental degradation.

The OECD is an intergovernmental organization that aims to unite countries to meet global challenges. To measure the global green growth process, the OECD has put forward a series of indicators and released several relevant reports over time. In 2016, the OECD issued its Green Growth Strategy, which pointed out that the global economy is slowly and steadily recovering from the recent severe economic crisis. This strategy believes that economic growth can be achieved while addressing climate change as well as preventing environmental degradation and the inefficient use of natural resources. Through cooperation with the government and the private sector, the strategy provides policy recommendations for developed and developing countries, and green growth has gradually gained support from countries globally. While maintaining economic sustainability, it aims for low carbon emissions and environmental protection.

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