Environmental protection via optimal global economic restructuring

Alexander Vaninsky

doi:10.1016/j.mex.2019.03.017

Abstract

This research proposes an approach to managing the environmental efficiency of the global economy via the optimal economic restructuring. The objective is to promote an increase in energy-environmental efficiency that supports economic growth constrained by greenhouse gas mitigation and energy conservation. The proposed method suggests the way of structural change in a global economy that the national economies should follow by economic restructuring, international cooperation, and trade. By following the recommended course of action, it becomes possible to increase the energy – environmental efficiency of the global economy as a whole via harmonized modifications in output per capita, use of renewable energy, and decrease in energy- and greenhouse gas emissions intensities. A novel stochastic data envelopment analysis with a perfect object method (SDEA PO) is utilized as a mathematical tool. A system of differential-algebraic equations is derived, leading to the determination of the trajectory of locally optimal structural change.•This study introduces a novel method aimed to guide the optimal economic restructuring of the global economy via economic growth constrained by energy conservation and greenhouse gas mitigation.•The suggested model provides guidance for energy-environmentally friendly economic restructuring of the global economy.

Highlights

This study introduces a novel method aimed to guide the optimal economic restructuring of the global economy via economic growth constrained by energy conservation and greenhouse gas mitigation
This requires that national and regional economies pool resources and coordinate efforts, allowing the world economy to grow while environmental issues are simultaneously addressed
We develop a tool able to guide the restructuring of the global economy in a way that delivers the greatest possible contribution to environmental protection

Summary

Introduction

As follows from the Formula (3), the DEA PO efficiency index is a product of maximum relative output and the inverse of the minimum relative input. The mathematical expectation of this random variable is considered as an efficiency measure of the whole group of the DMUs and is referred to as a group efficiency index Eg. In these settings, each input and output are normalized to the corresponding minimal or maximal values in the group, respectively, as in Formula (3).

Results

Conclusion