Green Total Factor Productivity for India: Some Recent Estimates and Policy Directions

Joshi, Shruti and Nath, Siddhartha and Ranjan, Abhishek (2023): Green Total Factor Productivity for India: Some Recent Estimates and Policy Directions.

Abstract

The conventional estimate of technological progress and aggregate productivity growth, the total factor productivity, or TFP, can be upwardly biased if environmental externalities generated during the production processes are not accounted for. In this paper, we revisit TFP growth rates across 146 countries in the world between 1990 and 2019 after accounting for their CO2 emissions. The Global Malmquist-Luenberger Productivity Index suggests that although India’s conventional TFP growth stands out to be one of the highest globally, especially since 2000, India’s average annual Green TFP growth is lowest, at almost zero per cent since 2000. Our estimates suggest that mostly the OECD countries may have maintained substantial progress in terms of green TFP, whereas the emerging economies in East and Southeast Asia may also be significantly lagging. While the policy tools in India are converging towards the advanced economies, our estimates suggest that India’s relative position has improved in terms of Green TFP growth in recent years.

• Item Type: MPRA Paper
• Language: English
• Keywords: Green Total Factor Productivity; Directional Distance Function; Global Malmquist–Luenberger Index
• Subjects: C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C43 - Index Numbers and Aggregation; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming

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