Abstract

This paper presents a growth accounting framework in which subsoil mineral and energy resources are recognized as natural capital input into the production process in two ways. Firstly, the income attributable to subsoil resources, or resource rent, is estimated as a surplus value after all extraction costs and normal returns on produced capital have been accounted for. The value of a resource reserve is then estimated as the present value of the future resource rents generated from the efficient extraction of the reserve. Secondly, with extraction as the observed service flows of natural capital, multifactor productivity growth and sources of economic growth can be reassessed by updating income shares of all inputs and then by estimating the contribution to growth coming from changes in the value of natural capital input.

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