Abstract
As economies pursue growth under pressing environmental constraints, conventional Total Factor Productivity (TFP) indicators risk perpetuating unseen unsustainability. By excluding natural capital and emissions, they conceal hidden risks that undermine long-term well-being and misrepresent the true sustainability of economic progress. This study introduces an Environmentally Adjusted Multifactor Productivity (EAMFP) index to address these blind spots. Using a Törnqvist-based growth accounting framework, we integrate renewable and non-renewable natural capital and adjust outputs for CO₂ emissions. The analysis spans seven world regions from 1995 to 2020, contrasting conventional TFP with its environmentally adjusted counterpart. Findings reveal profound regional heterogeneity. East and South Asia combine rapid growth with weak efficiency, exposing vulnerabilities behind apparent dynamism. Europe and North America show moderate expansion coupled with meaningful decoupling of environmental impacts, suggesting pathways toward more resilient productivity. Latin America and the Caribbean (LAC) and the Middle East and North Africa (MENA) face stagnation and low efficiency, while Sub-Saharan Africa’s volatile growth highlights fragile and uneven performance. These divergences expose the hidden trade-offs between expansion and decarbonization, emphasizing how reliance on conventional productivity metrics masks sustainability risks. Rather than advocating a single measure, we propose a comparative framework that captures these invisible dimensions of productivity. By making unseen unsustainability visible, the EAMFP framework equips policymakers with clearer evidence to design equitable, long-term strategies for green and just transitions.
Presenters
Yazari AgudeloStudent, PhD - Business and Territorial Competitiveness, Innovation and Sustainability, Deusto University, Spain
Details
Presentation Type
Paper Presentation in a Themed Session
Theme
2026 Special Focus—Unseen Unsustainability: Addressing Hidden Risks to Long-Term Wellbeing for All
KEYWORDS
Productivity, Environmentally Adjusted TFP, Green Transition, Natural Capital, Decarbonization, Regional
