OECD Green Growth Papers
The OECD Green Growth Strategy, launched in May 2011, provides concrete recommendations and measurement tools to support countries’ efforts to achieve economic growth and development, while at the same time ensure that natural assets continue to provide the ecosystems services on which our well-being relies. The strategy proposes a flexible policy framework that can be tailored to different country circumstances and stages of development.
OECD Green Growth Papers complement the OECD Green Growth Studies series, and aim to stimulate discussion and analysis on specific topics and obtain feedback from interested audiences.
- ISSN: 22260935 (online)
- https://doi.org/10.1787/22260935
Adjusting Productivity for Pollution in Selected Asian Economies
Multifactor productivity (MFP) is increasingly used in economic policy, not least to compute potential
output. Most measures are based on a standard production function combining labour and capital, but do not
incorporate the negative by-products of the production process such as air pollution that could have deleterious
effect on health and productivity in the medium to long term (see for instance OECD (2014)). The failure to
account for the costs of environmental damages and the benefits associated with emission reduction impart a
bias to standard measures of MFP. Ignoring these dimensions can give a misleading idea of growth prospects
over the medium to long term...
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