Assessment of Green Total Factor Productivity on the Environmental Sustainability of Pakistan: Insights through Growth Accounting Framework

Abstract

The research investigates the concept of green total factor productivity (TFP), with economic growth leadings towards the sustainable production. The paper investigates the CO2 interventions for total factor productivity for government, and policy makers to reduce carbon dioxide emissions and enhance productivity. The paper analysis is preceded using annual year’s data for gross domestic product (GDP), capital growth, labor growth, and carbon dioxide emanations.  The data is grabbed from World Bank development Indicators (WDI) online database for year 1975 to 2019. The analysis is done by Growth Accounting Framework and MALMQUIST Luneberger Index. Total Factor Productivity is analyzed in two perspectives i.e. with carbon dioxide and without carbon dioxide emissions. The findings indicated that there is little contribution of TFP without carbon dioxide emissions which is -0.23. The value of TFP with carbon dioxide emissions gives an average per year value of -20.41 which is -0.41. The average growth in carbon dioxide is 2.94 averages per year. The highest carbon dioxide growth is 0.9. The highest value for growth development is -26.86. MALMQUIST Index concludes that Pakistan needs to work for the technological developments. The paper examined that green total factor productivity improves economic growth and reduces the carbon emission in the country. The policymakers and top management must employ the sustainable activities to retain the better growth with economic development in the near future.