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A Broadened Concept of Wealth and Sustainable Development

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Green Development in China

Part of the book series: SpringerBriefs in Economics ((BRIEFSECONOMICS))

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Abstract

A growing concern that China and most other developing countries face is that the patterns of their economic growth and development cannot be sustained because they tend to result in irreversible depletion of natural resources and deterioration of the ecological environment. It is mostly such concerns that have helped spawn an ever-increasing body of relevant literature on sustainable growth and development. However, There still remains a considerable challenge for scholars and policy makers to arrive at a theoretically consistent and empirically feasible criterion for evaluating policies that target sustainability in economic growth and development—especially under the current fast-growing climate of globalization.

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Notes

  1. 1.

    Our sample in Jiang (2015) was 28 Chinese province-level regions over the period 1997–2011. These regions include provinces, ethnic minority autonomous regions, and province-level municipalities, but for convenience’s sake we call all of them ‘provinces’. Owing to incomplete data, Tibet, Chongqing and Hainan are not included in our sample.

  2. 2.

    Series of the total volume of industrial waste gas emission, series of nominal Gross Regional Product (GRP), GRP indices, and numbers of total employed people (1997–2011) for each province are directly available from the Chinese Statistical Yearbooks (1997–2012), so that values of real GRP (1997–2011) for each province can be calculated. Real per worker output is calculated as real GRP divided by the number of total employed people for each province. Per worker pollution emission is calculated as the total volume of industrial waste gas emission divided by the number of total employed people for each province.

  3. 3.

    The Chinese Statistical Yearbooks, however, do not directly record data on physical capital stocks for the Chinese regions. To obtain annual data on real provincial capital stocks, we follow the basic procedure of Zhang et al. (2007) and Zhang (2008), and use a perpetual inventory method (PIM) to construct physical capital stock data for the Chinese provinces—where we specifically assume that the annual depreciation rates of physical capital are uniformly 9.6 % for all the provinces throughout our sample period. Once the values of real provincial capital stocks are obtained, it is then straightforward to calculate the corresponding values of real provincial per worker capital stocks.

  4. 4.

    In this context, Tzouvelekas et al. (2006) refered to a few examples of the literature in which the production function was specified to include the flow of pollution emissions as an input and sometimes, productivity enhancing environmental quality as a stock variable: Brock (1973), Becker (1982), Tahvonen and Kuluvainen (1993), Bovenberg and Smulders (1995), Smulders and Gradus (1996), Mohtadi (1996), Xepapadeas (2005), Brock and Taylor (2005), and Considine and Larson (2006).

  5. 5.

    Alternative regressions generated results similar to those of the FE regression. The RE GLS regression generated an estimated \( \beta_{2} \) that was 0.460, with a 95 % confidence interval of [0.414, 0.506], and an estimated \( \beta_{1} \) that was 0.069, with a 95 % confidence interval of [0.050, 0.089]. The plain pooled cross section OLS regression produced an estimated \( \beta_{2} \) that was 0.439, with a 95 % confidence interval of [0.392, 0.485], and an estimated \( \beta_{1} \) that was 0.069, with a 95 % confidence interval of [0.048, 0.090]. Jiang (2015) also found that the inclusion of the year dummies did not alter the regression results in any important ways.

  6. 6.

    Given our assumptions made on China’s green growth and results obtained from our regressions, we did not predict long-run environmentally sustainable growth for China. Moreover, as a byproduct, we were able to estimate the structural parameter \( \alpha \) in the aggregate production function. We ended up with an estimated value of \( \alpha \) that was around 0.50, in the very vicinity of its empirically accepted values for the case of China (Zheng et al. 2009; Brandt and Zhu 2010; Jiang 2011, 2012). Normally the structural parameter \( \alpha \) varies across nations. For example, according to Zheng et al. (2009), for the United States, \( \alpha \) was 0.30. (See also Congressional Budget Office 2001), for the EU, it was about 0.40 (See also Musso and Westermann 2005), and for China, it was around 0.50 (see also Chow and Li 2002 and Chow 2008). Therefore, this piece of by-product result lent support to our main results here in this study.

  7. 7.

    For more discussions, see, for example, Zhang and Crooks (2011).

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  1. School of Economics and Finance, Shanghai International Studies University, Shanghai, China

    Yanqing Jiang

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Jiang, Y. (2016). A Broadened Concept of Wealth and Sustainable Development. In: Green Development in China. SpringerBriefs in Economics. Springer, Singapore. https://doi.org/10.1007/978-981-10-0693-7_3

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