Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/316997 
Year of Publication: 
2024
Series/Report no.: 
ETLA Report No. 151
Publisher: 
The Research Institute of the Finnish Economy (ETLA), Helsinki
Abstract: 
This report discusses the shortcomings of conventional productivity measures that overlook the environmental efforts of firms aiming to reduce greenhouse gas emissions. It highlights the importance of utilizing green productivity metrics, such as carbon productivity and green total factor productivity, for a more comprehensive assessment of productivity within the context of sustainable development. Key findings from recent empirical research conducted in Finland reveal a positive correlation between carbon and labor productivity, demonstrating that environmentally friendly practices can enhance both sustainability and efficiency in energy-intensive sectors. Energy efficiency also positively affects firm productivity, emphasizing the potential advantages of environmental regulations in driving economic growth, while simultaneously maintaining ecological well-being. Furthermore, carbon productivity exhibits a procyclical pattern, with financially stronger firms seeking more environmentally conscious workers (i.e., offering green jobs) during periods of economic growth. The report also recognizes the challenge of overcoming technological path dependence and suggests strategies such as public funding for clean technology R&D and leveraging EU-level green investment programs, particularly for smaller nations like Finland.
Subjects: 
Carbon productivity
Green jobs
Green total factor productivity
Green transition
Energy efficiency
JEL: 
D24
O44
Q55
Q56
Document Type: 
Research Report

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