Environmental protection via optimal global economic restructuring

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.