Economic Performance and Environmental Quality at the Regional Level An Approach to Modeling Depletion Adjusted Macro Aggregates for the Czech Coal Mining Regions

Economic Performance and Environmental Quality at the Regional Level An Approach to Modeling Depletion Adjusted Macro Aggregates for the Czech Coal Mining Regions

Egor Sidorov (Jan Evangelista Purkyne University, Czech Republic) and Iva Ritschelová (Jan Evangelista Purkyne University, Czech Republic)
DOI: 10.4018/978-1-60960-156-0.ch014
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Abstract

The chapter describes an approach for the calculation of coal depletion adjusted regional macroeconomic aggregates for the coal mining regions of the Czech Republic. In the first part of the chapter, the concept of depletion adjusted macroeconomic aggregates is discussed. The next two parts provide a description of the coal mining regions as well as the position of the coal mining industry in the Czech economic structure. The final part of the chapter describes the methodological approach to resource rent and depletion modeling. After that, the coal depletion adjusted macroeconomic aggregates are presented, followed by our conclusions.
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Background

The generally recognized definition of sustainable development was published by the World Commission in 1987, and is formulated as “development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs” (World Commission on Environment and Development, 1987). Paraphrasing the Hicksian dynamic approach to income (see Hicks, 1939), one can say that (sustainable) income is the maximum value that it is possible to consume during a period and still expect to be as well off at the end of the period as at the beginning. According to utilitarian theory, the capital stock available to a nation generates income (or a flow of utility that actually “meets the needs” of the society). In this respect sustaining the capital stock per capita would maintain the same per-capita utility flow for the present and future generations, or in other words, would lead to sustainable income.

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