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Environmental Management
Published in: Environmental Management 4/2016

31-12-2015

Estimating Green Net National Product for Puerto Rico: An Economic Measure of Sustainability

Authors: Shanshan Wu, Matthew T. Heberling

Published in: Environmental Management | Issue 4/2016

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Abstract

This paper presents the data sources and methodology used to estimate Green Net National Product (GNNP), an economic metric of sustainability, for Puerto Rico. Using the change in GNNP as a one-sided test of weak sustainability (i.e., positive growth in GNNP is not enough to show the economy is sustainable), we measure the movement away from sustainability by examining the change in GNNP from 1993 to 2009. In order to calculate GNNP, we require both economic and natural capital data, but limited data for Puerto Rico require a number of simplifying assumptions. Based on the environmental challenges faced by Puerto Rico, we include damages from air emissions and solid waste, the storm protection value of mangroves and the value of extracting crushed stone as components in the depreciation of natural capital. Our estimate of GNNP also includes the value of time, which captures the effects of technological progress. The results show that GNNP had an increasing trend over the 17 years studied with two periods of negative growth (2004–2006 and 2007–2008). Our additional analysis suggests that the negative growth in 2004–2006 was possibly due to a temporary economic downturn. However, the negative growth in 2007–2008 was likely from the decline in the value of time, suggesting the island of Puerto Rico was moving away from sustainability during this time.
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Appendix
Available only for authorised users
Footnotes
1
Puerto Rico’s Sustainable Development Law #267: http://​www.​oslpr.​org/​download/​en/​2004/​0267.​pdf. Accessed on August 20, 2015.
 
2
A small open economy participates in international trade and exhibits price-taking behavior (Vincent 1997).
 
3
Import-associated emissions are excluded from this vector.
 
5
EM-DAT: The OFDA/CRED international disaster database—www.​emdat.​be—Université catholique de Louvain—Brussels—Belgium. Accessed on August 20, 2015. Puerto Rico Hurricane Center was accessed at http://​huracanado1.​tripod.​com/​ on August 20, 2015.
 
6
SPR is a management benchmark that measures a stock's potential to produce yields on a sustainable basis. 30 % SPR is defined as the threshold below which a stock is no longer sustainable at current exploitation levels (Ault et al. 2008).
 
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Metadata
Title
Estimating Green Net National Product for Puerto Rico: An Economic Measure of Sustainability
Authors
Shanshan Wu
Matthew T. Heberling
Publication date
31-12-2015
Publisher
Springer US
Published in
Environmental Management / Issue 4/2016
Print ISSN: 0364-152X
Electronic ISSN: 1432-1009
DOI
https://doi.org/10.1007/s00267-015-0649-z

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