Role of natural resource potential in economic growth of ukrainian economy: institutional dimension
Показано, що відсутність «справедливої» грошової оцінки природних ресурсів призводить до надлишкового виробництва приватних благ з мінімальним обсягом виробництва суспільних благ. Розкрито зміст фізичних, соціальних, економічних характеристик природних ресурсів як блага. Сформовано модель оцінки впл...
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Popova, O.Yu. Belousova, К.O. Tomashevska, O.Yu. Kulakov, O.O. 2013-11-24T22:24:11Z 2013-11-24T22:24:11Z 2013 Role of natural resource potential in economic growth of ukrainian economy: institutional dimension / O.Yu. Popova, К.O. Belousova, O.Yu. Tomashevska, O.O. Kulakov // Економіка пром-сті. — 2013. — № 1-2 (61-62). — С. 297-302. — Бібліогр.: 14 назв. — англ. 1562-109Х https://nasplib.isofts.kiev.ua/handle/123456789/51340 332.146.2+504.062 Показано, що відсутність «справедливої» грошової оцінки природних ресурсів призводить до надлишкового виробництва приватних благ з мінімальним обсягом виробництва суспільних благ. Розкрито зміст фізичних, соціальних, економічних характеристик природних ресурсів як блага. Сформовано модель оцінки впливу інтенсивності споживання природних ресурсів на економічне зростання. Ключові слова: природно-ресурсний потенціал, економічне зростання, добробут, благо, модель, інститут, компонента. Показано, что отсутствие «справедливой» денежной оценки природных ресурсов приводит к избыточному производству частных благ с минимальным объемом производства общественных благ. Раскрыто содержание физических, социальных, экономических характеристик природных ресурсов как блага. Сформирована модель оценки влияния интенсивности потребления природных ресурсов на экономический рост. Ключевые слова: природно-ресурсный потенциал, экономический рост, благосостояние, благо, модель, институт, компонента. Natural resource use gives rise to public and private goods and services in national economy. Decision making in large corporations involved in the extraction and processing of natural resources in Ukraine, based on generation of profit, is the legitimate possibility of transferring responsibility and payment for environmental pollution and depletion of natural resources to the state. And the lack of «fair» money value of natural resources and ecological damage results in excessive production of private welfare with a minimum production of public welfare. As a result the disproportions accumulate that endanger a possibility of long-term economic growth. In the present work the characteristics of natural resources as welfare are presented, namely, physical, social, and economic ones. Twotrajectories form the theoretical framework of the model of economic development in Ukraine. The first trajectory is oriented to the law of propertythat can be established in the market of externalities. The second trajectory of ecological economy is the approach of balance materials, which characterize the limits of development by entropy. At the same time, peculiarities of failures of environmental management in Ukraine are substantiated. Failures of the market and failures of the government are identified. The choice of the method for transformation of a natural resource into welfare depends on a number of factors. These factors are: scientific and technological advance, the existing technologies of production, the access to required investment, institutional standards (legislations, traditions, culture, religion, etc.), the knowledge of methods of resource consumption and the amount of resource used in the course of production and consumption. Requirements and desires of resource consumers can vary with time and space and are of particular importance in choice. It is necessary to consider the transformation of a natural resource into welfare from the viewpoint of economic, social, and ecological components. Their correlation depends on the potential of the natural resource, applicable technologies, and acting institutions (formal and informal ones). The model for estimation of the effect of natural resources on economic growth is presented. The model includes the level of satisfaction of consumer needs and used fuel and energy resources. By the extension method, we present a multi-factor model accounting of economic, environmental, and social components of economic growth. The results of the assessment of economic, social, and ecological components of economic growth demonstrate a uniform increase in size of the economic component. Keywords: natural resource potential, economic growth, welfare, model, institution, component. en Інститут економіки промисловості НАН України Економіка промисловості Проблеми стратегії розвитку та фінансово-економічного регулювання промисловості Role of natural resource potential in economic growth of ukrainian economy: institutional dimension Роль природно-ресурсного потенціалу в економічному зростанні української економіки: інституціональний аспект. Роль природно-ресурсного потенциала в экономическом росте украинской экономики: институциональный аспект Article published earlier |
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Digital Library of Periodicals of National Academy of Sciences of Ukraine |
| collection |
DSpace DC |
| title |
Role of natural resource potential in economic growth of ukrainian economy: institutional dimension |
| spellingShingle |
Role of natural resource potential in economic growth of ukrainian economy: institutional dimension Popova, O.Yu. Belousova, К.O. Tomashevska, O.Yu. Kulakov, O.O. Проблеми стратегії розвитку та фінансово-економічного регулювання промисловості |
| title_short |
Role of natural resource potential in economic growth of ukrainian economy: institutional dimension |
| title_full |
Role of natural resource potential in economic growth of ukrainian economy: institutional dimension |
| title_fullStr |
Role of natural resource potential in economic growth of ukrainian economy: institutional dimension |
| title_full_unstemmed |
Role of natural resource potential in economic growth of ukrainian economy: institutional dimension |
| title_sort |
role of natural resource potential in economic growth of ukrainian economy: institutional dimension |
| author |
Popova, O.Yu. Belousova, К.O. Tomashevska, O.Yu. Kulakov, O.O. |
| author_facet |
Popova, O.Yu. Belousova, К.O. Tomashevska, O.Yu. Kulakov, O.O. |
| topic |
Проблеми стратегії розвитку та фінансово-економічного регулювання промисловості |
| topic_facet |
Проблеми стратегії розвитку та фінансово-економічного регулювання промисловості |
| publishDate |
2013 |
| language |
English |
| container_title |
Економіка промисловості |
| publisher |
Інститут економіки промисловості НАН України |
| format |
Article |
| title_alt |
Роль природно-ресурсного потенціалу в економічному зростанні української економіки: інституціональний аспект. Роль природно-ресурсного потенциала в экономическом росте украинской экономики: институциональный аспект |
| description |
Показано, що відсутність «справедливої» грошової оцінки природних ресурсів призводить до надлишкового виробництва приватних благ з мінімальним обсягом виробництва суспільних благ. Розкрито зміст фізичних, соціальних, економічних характеристик природних ресурсів як блага. Сформовано модель оцінки впливу інтенсивності споживання природних ресурсів на економічне зростання.
Ключові слова: природно-ресурсний потенціал, економічне зростання, добробут, благо, модель, інститут, компонента.
Показано, что отсутствие «справедливой» денежной оценки природных ресурсов приводит к избыточному производству частных благ с минимальным объемом производства общественных благ. Раскрыто содержание физических, социальных, экономических характеристик природных ресурсов как блага. Сформирована модель оценки влияния интенсивности потребления природных ресурсов на экономический рост.
Ключевые слова: природно-ресурсный потенциал, экономический рост, благосостояние, благо, модель, институт, компонента.
Natural resource use gives rise to public and private goods and services in national economy. Decision making in large corporations involved in the extraction and processing of natural resources in Ukraine, based on generation of profit, is the legitimate possibility of transferring responsibility and payment for environmental pollution and depletion of natural resources to the state. And the lack of «fair» money value of natural resources and ecological damage results in excessive production of private welfare with a minimum production of public welfare. As a result the disproportions accumulate that endanger a possibility of long-term economic growth. In the present work the characteristics of natural resources as welfare are presented, namely, physical, social, and economic ones.
Twotrajectories form the theoretical framework of the model of economic development in Ukraine. The first trajectory is oriented to the law of propertythat can be established in the market of externalities. The second trajectory of ecological economy is the approach of balance materials, which characterize the limits of development by entropy.
At the same time, peculiarities of failures of environmental management in Ukraine are substantiated. Failures of the market and failures of the government are identified.
The choice of the method for transformation of a natural resource into welfare depends on a number of factors. These factors are: scientific and technological advance, the existing technologies of production, the access to required investment, institutional standards (legislations, traditions, culture, religion, etc.), the knowledge of methods of resource consumption and the amount of resource used in the course of production and consumption. Requirements and desires of resource consumers can vary with time and space and are of particular importance in choice. It is necessary to consider the transformation of a natural resource into welfare from the viewpoint of economic, social, and ecological components. Their correlation depends on the potential of the natural resource, applicable technologies, and acting institutions (formal and informal ones).
The model for estimation of the effect of natural resources on economic growth is presented. The model includes the level of satisfaction of consumer needs and used fuel and energy resources. By the extension method, we present a multi-factor model accounting of economic, environmental, and social components of economic growth. The results of the assessment of economic, social, and ecological components of economic growth demonstrate a uniform increase in size of the economic component.
Keywords: natural resource potential, economic growth, welfare, model, institution, component.
|
| issn |
1562-109Х |
| url |
https://nasplib.isofts.kiev.ua/handle/123456789/51340 |
| citation_txt |
Role of natural resource potential in economic growth of ukrainian economy: institutional dimension / O.Yu. Popova, К.O. Belousova, O.Yu. Tomashevska, O.O. Kulakov // Економіка пром-сті. — 2013. — № 1-2 (61-62). — С. 297-302. — Бібліогр.: 14 назв. — англ. |
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–––––––––––––––––––––– Економіка промисловості Экономика промышленности ––––––––––––––––––––––
ISSN 1562-109X 297
2013, № 1-2 (61-62)
УДК 332.146.2+504.062 Olga YuriyivnaPopova,
Dr. of Science (Economics), Prof.
Karina OleksiyivnaBelousova,
OlenaYuriyivnaTomashevska,
National Technical University Donetsk
OleksiyOleksiyovychKulakov,
State research organization «The center productivity
of Ministry social policy of Ukraine», Kramatorsk
ROLE OF NATURAL RESOURCE POTENTIAL IN ECONOMIC
GROWTH OF UKRAINIAN ECONOMY: INSTITUTIONAL DIMENSION
Contemporary development of Ukrainian
economy is associated with strengthening of a
number of factors determined by the state of
environment. First of all, the stock of natural
resources should be mentioned because they
form material and technical base of production.
Natural resources acquired especial importance
for production industry in Ukraine because the
part of material expenditures was 64,0% in
2010-2011 [1, p. 108]. Significant consumption
of natural resources by native industrial plants
determines insufficient effectiveness of business
activity with unsatisfactory results. The part of
operating costs in the total volume of the prod-
ucts soldin 2011 was 95 kop. per 1 UAH in in-
dustry and it exceeded 102,7 kop. per 1 UAH in
processing industry [1, p. 109]. At these condi-
tions, correct establishment of the place and role
of natural resources in business activity of in-
dustrial plants is an actualproblem that allows
adequate application of the principles of sustain-
able development to the practice.
Global ecological challenges force socie-
ties to develop and implementthe principal new
approaches in order to provide growth of econ-
omy. Principles of sustainable development de-
clared in 1992 in Rio de Janeiro were aimed at
harmonic adoption to balanced nature manage-
ment and maximization of satisfaction of needs
of contemporary and future generation and re-
sulted in certain positive changes. Participation
and access to ecological information and justice
as obligatory components of viable society
should be considered as the most successful
principles realized for now. At the same time,
specialists recognize that along with successful
realization of politics of sustainable develop-
ment a number of problems arise related to low
temps of economic growth, intensification of
poverty, increase in ecological problems, accel-
erated extinction of species, famine and the rate
of spread of diseases. The data reported on the
conference Rio+20 proved inefficiency of appli-
cation of the principles of sustainable develop-
ment, low level of coordination, sequence and
consistency of actions of separate individuals
and society as a whole [2]. These problems con-
cern the development of the Ukrainian economy
as well.
The problems of assessment of the place
and role of natural resources in business activity
in industry were considered in a number of pa-
pers. In the works of R.F. Nash and D.W. Pearce
models of social development were formulated
based on the consumption of natural resources
with respect to stability principles [3; 4]. The
necessity of ecological management was empha-
sized in the works of I. Alexandrov and A. Po-
lovyan [5]. The researchers stated special impor-
tance of the development of strategies of sus-
tainable development of industrial regions based
on balanced system of economy, ecology and
social sphere [6]. The papers mostly interpreted
economic parameters of natural resource man-
agement in activity of industrial plants. At the
same time natural resources obtain both social
and ecological importance affecting the expense
structure and the value of the profit.
The present paper is aimed at specifica-
tion of the conception of natural resources and
establishment of their place and role in the de-
velopment of the national economy in realiza-
tion of the politics of sustainability in Ukraine.
Economy of Ukraine is affected by nega-
tive consequences of global financial economic
crisis of 2008. In these conditions the solutions
of the problem of rational management of natu-
ral resources at simultaneous economic growth
are considered separately. This situation is re-
lated to the fact that in Ukraine the main empha-
© O.Yu. Popova, K.O. Belousova,
O.Yu. Tomashevska, O.O. Kulakov, 2013
–––––––––––––––––––––––––– Економіка промисловості Economy of Industry ––––––––––––––––––––––––––
298 ISSN 1562-109X
2013, № 1-2 (61-62)
sis in the management of natural resource poten-
tial is put on the establishment of property rights
and legal regimes,which guarantee the excess of
rent for individual agents. Maximization of
added value is provided by means of elimination
of a wide range of consumers out of the process
of management of natural resources (often by
illegitimate methods), corruption and bureau-
cratic schemes of obtaining rights to use natural
resources. Small business, that displays the in-
terests of the majority of the population of
Ukraine, becomes unprofitable, whichintensifies
the poverty of the national economy. Decision
making in large corporations involved in the
extraction and processing of natural resources in
Ukraine based on generation of profit is the le-
gitimate possibility of transferring responsibility
and payment for environmental pollution and
depletion of natural resources to the state. And
the lack of «fair» money value of natural re-
sources and ecological damage results in exces-
sive production of private welfare with a mini-
mum production of public welfare. As a result
disproportions accumulate that endanger a pos-
sibility of long-term economic growth. Natural
resources are considered as welfare with the
characteristics presented in Table 1. These char-
acteristics should be taken into account in the
development of mechanisms of providing long-
term economic growth in Ukraine (see Table 1).
Table 1
Characteristics of natural resources as welfare
PHYSICAL
CHARACTERISTICS
SOCIAL
CHARACTERISTICS
ECONOMIC
CHARACTERISTICS
Physical limitation, non-
uniformity of placing
Natural right of human, life com-
fort for agents, institutional rules
in consumption
Object of utility
Speed of accumulation and
recovery
Compulsory exception from us-
ing process
Free wastes assimilation
Depletion, degradation Forming a status in society * Means of production and
objects for consumption
Transformation of physical state Behavior of actors * Services (recreation, transport
etc.)
* Developed by authors
Neoclassical economy requires strict dif-
ferentiation and separation of economic system
from natural and social ones. Natural capital is
considered as a source of material-substantiated
welfares, which can be used in the course of
production of welfare being free of charge ex-
cept the cost of extraction. Development is re-
flected by growth of gross domestic product or
regional product affected by deficiency of sepa-
rate resources and stimulated by technical pro-
gress. Namely, the last factor of promotion
counteracts depletion of natural capital and per-
mits to diminish costs on extraction of natural
resources. Substitution of resources and the type
of capital is an infinite process and depends only
on technological progress (Cobb-Douglas
model). Based on the conception of sustainable
development the economic progress is viable
when resource potential of management subject
remains constant for a long time. Constant value
of resource potential can be achieved at the ex-
pense of compensation of resources consumed
in processes of economic management by other
resources. Such optimization does not allow the
support of the physical and cost characteristics
of resource potential as technological substitu-
tion can be realized in favour of reduction in
price and diminish quality resources attracted to
production. Therefore such type of sustainability
should be considered as a weak one [7].
Contemporary paradigm of development
is supplemented by ecological economy that
tries to overcome disadvantages of neoclassical
economy. The main ideas generated within the
limits of ecological economy are as follows. The
first trajectory is oriented to the law of property
that can be established in the market of external-
ities. The problem of limitation of economic
growth as a result of environment pollution is
got over by pollutants and recipients through
–––––––––––––––––––––– Економіка промисловості Экономика промышленности ––––––––––––––––––––––
ISSN 1562-109X 299
2013, № 1-2 (61-62)
trade by laws, whichexcludes necessity of state
interference (model of R. Coase). The result-
sarethe «polluter pays» principle and the trade of
marketable pollution permitted. The second tra-
jectory of ecological economy is the approach of
balance materials, which characterize the limits
of development by entropy. In this sense pollu-
tion of environment and depletion of resource
potential are not only the results of market re-
fusal but also an inevitable phenomenon condi-
tioned by laws of thermodynamics that force
government to fix acceptable levels of pollution
from the position of social and private criteria
[8].
Disciplinary sphere of ecological econ-
omy is aimed at three main purposes: first, esti-
mating and ensuring that the scale of people ac-
tivity is ecologically viable; second, ensuring
that distribution of resources is equitable within
the limits of current generation, between future
generations and between species; and third, the
effective assignation of market and non-market
resources with account of the limits of develop-
ment. Natural capital, human capital and inter-
dependent artificial capital are interdependent
and largely complementary [9]. The conception
of sustainable ecological economy is linked with
elasticity of natural and artificial capital and
with human resources. This means that the pro-
duction of welfare requires a rigorous combina-
tion of resources, the substitution of which re-
sults in a welfare that cannot be compared with
the other ones with respect to consumer charac-
teristics. Therefore, sustainable development of
Ukrainian economy can be achieved through the
development of natural resource potential (see
Table 2).
Table 2
Peculiarities of failures of environmental management in Ukraine*
FAILURE OF MARKET FAILURE OF GOVERNMENT
Minimal government intervention Authority over economic well-being of consum-
ers natural resources
Priority of economic decision making criteria Priority of social decision making criteria
Externalities are paid by third parties (the concept
of "black driver")
Government subsidizes the solution of environ-
mental issues
Priority of the private welfare Priority of the collective welfare
Unregulated profit-oriented natural monopoly Monopolization of the right of choice of technol-
ogy and the subordination of public interests to
private purposes of the authorities
* See [7, 10]
In general, effectiveness of any decision
or action is evaluated from the position of com-
paring the results and the cost of achieving these
results. From the position of evaluation of ra-
tional nature use and provided economic growth
for both producers and consumers the effective-
ness should be calculated as a ratio of the vol-
ume of used goods and services and the quantity
involved in ensuring the production of natural
resources. As a consequence, the effectiveness
related to consumers can be assessed as follows:
,CNSR
R
(1)
whereSR is the effect of natural resources on
economic growth, UAH / conventional ton;
CN is the level of satisfaction of consumer needs
(Gross Domestic Product), million UAH;
Risfuel and energy resources used, conventional
ton.
Effect of natural resources on economic
growth is calculated by (1) permits to evaluate
the level of welfare and economic growth. How-
ever, there are some absent characteristics af-
fecting the consumer behavior direction:
1) theaccess to information about envi-
ronmental properties of products and services,
that is operative, complete and trustworthy;
2) theconformity of product produced to
social institutions (norms, values, traditions);
3) the value of consumption of products
produced (including the payment of taxes, con-
sumption of fixed capital, intermediate con-
sumption of goods, material and non-material
services for industrial needs).
–––––––––––––––––––––––––– Економіка промисловості Economy of Industry ––––––––––––––––––––––––––
300 ISSN 1562-109X
2013, № 1-2 (61-62)
Formula (1) requires taking into account
the above three features, which can be success-
fully implemented with the extension method to
become the multiplicative factor model, where
economic, environmental and social components
of economic growth are presented:
= ,econ soc ecol
CN P EPSR R R R
R EP R
(2)
where P is the population size, thousand person;
EP are total ecological costs (ecological pay-
ments, fines, capital investments in environ-
mental protection, the current ecological costs of
agents), thousand UAH; Recon is the economic
component of economic growth, million UAH /
person; Rsoc is the social component of economic
growth, person / UAH; Recol is the ecological
component of economic growth, million UAH /
conventional ton.
The economic component of economic
growth is a universal measure of social wellbe-
ing, the growth of which in time should be pro-
vided rather by growth of GDP than by the
population growth. Social component of eco-
nomic growth is reflected in the number of peo-
ple who must pay 1 UAH of the total sum of
ecological costs carried by economic agent. A
part of the costs is included in the price of the
product, and another one is paid from net prof-
its. Because of reduction in the amount of profit,
and limitation or reduction of opportunities in
economic activity in the future, the second part
will affect the consumer effectiveness of devel-
opment.
The last component demonstrates the eco-
logical effectiveness of the consumer’s ecologi-
cal behaviorstimulation and allows estimating
the fraction of the total ecological costs of soci-
ety conditioned by the use of fuel and energy
resources. Maximization of the significance of
the last element should include advance reduc-
tion in consumption of fuel and energy resources
while reducing the total environmental costs.
The results of the assessment of eco-
nomic, social, and ecological components of
economic growth are presented in Table. 3.
They illustrate a uniform increase in the eco-
nomic component (the average rate of annual
growth is approximately 27,8% per year) (see
Table 3).
Table 3
Analysis of the economic, social, and ecological components
of economic growth in Ukraine
Indicators Years
2005 2006 2007 2008 2009 2010
CN* 441452 544153 720731 948056 913345 1094607
P* 47,3 46,9 46,6 46,4 46,1 46
EP* 7089,2 7366,6 9691 12176 11073,5 13128
R* 170 174,3 175,7 166,4 137,7 149,6
SR 2596,78 3121,93 4102,05 5697,45 6632,86 7316,89
Recon 9333,02 11602,41 15466,33 20432,24 19812,26 23795,80
Rsoc 0,0067 0,0064 0,0048 0,0038 0,0042 0,0035
Recol 41,70 42,26 55,16 73,17 80,42 87,75
* http://ukrstat.gov.ua/
In 2005-2010 the economic effectiveness
increased from 9333,02 million UAHperperson
to 23795,80 million per person. This indicates
the growth of production and consumption of
public welfares that is one of the manifestations
of improvement of well-being of society. A
similar positive dynamics is observed in increas-
ing the size of the ecological effectiveness of
stimulation of ecological behavior (average an-
nual growth rate is about 22% per year). In 2005
the indicator was 41,70 million UAH per con-
ventional ton of fuel and energy resources,
which were traditionally considered to be ex-
haustive and non-renewable; in 2010 the level of
spending on environmental protection and resto-
ration of natural-resource potential by consump-
tion of 1 conventional ton of fuel and energy
resources constituted 87,75 million UAH (the
growth rate was practically 2 times higher). So-
cial component tended to improvement. In this
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ISSN 1562-109X 301
2013, № 1-2 (61-62)
case, the inverse value of Rsocyields the amount
of the total ecological costs attributable to one
person living in Ukraine. In 2005 the value of
Rsoc was 0,0067. This expression means that one
person has in average 149,88UAH oftotal eco-
logical costs of rational environmental manage-
ment and reproduction quality of the environ-
ment. At the end of 2010 the level of Rsocreached
0,0035. This fact indicated a significant increase
in the level of total environmental payments, the
absolute value of which was 285,39UAH / per-
son. Growth rate of effectiveness due to social
component for the period of 2005-2010 consti-
tuted 1,9 corresponding to the rate of growth of
effectiveness due to the ecological component.
At the same time, revealed positive dy-
namics of growth of the economic, social, and
ecological components can be considered in
terms of "price" paid by society for satisfaction
of its own requirements. From this position, the
GDP growth as an indicator of social wellbeing-
cannot get a positive evaluation. With the
growth of the absolute volume of consumption
of natural resources and the gradual depletion of
the natural resource potential, society pays not
only the ecological costs associated with the
implementation of measures for rational envi-
ronmental management, protection and repro-
duction of natural resource potential, but also
the ecological costs aimed at the intensification
of extraction, processing and consumption of
natural resources, obtaining of ownership and
control over limited natural resources in order to
receive an excess of rent or to prevent and
eliminate the negative effects of depletion of
natural resource potential, which results in com-
plication of conditions of personal and profes-
sional business activity.
Consumer awareness of the importance of
integrating ecological, economic and social fac-
tors explains the emergence of markets for envi-
ronmentally friendly products, where the level
of satisfaction from the direct consumption is
not lower than the level of satisfaction of aware-
ness that production and consumption of the
product or service does not damage the envi-
ronmentor even improves it. According to spe-
cialists’estimate, the rate of growth of the mar-
kets for environmentally friendly products often
exceeds the growth in traditional sectors. This
fact is usually characterized as green boom
comparable to the digital boom. According to
analytical company «New Energy Finance»,
energy investments in 2008 amounted to about
350 billion USD; 155 billion USD accounted to
renewable energy: from 2004 to 2008 there was
an average annual increase by 50%. According
to German consulting firm Roland Berger, in
2008 the world market of economical goods and
services amounted to 1.4 billion USD, and it is
expected to double by 2020 [11].
In the national economic entities are char-
acterized by the use of a number of formal at-
tributes of environmentally friendly products in
order to attract customers and achieve growth
and the level of profit at the cost of these sales.
In particular, for this purpose eco-labels are in-
troduced (for example, Green Crane in Ukraine,
Blue Angel in Europe) and environmental infra-
structure is created (environmental insurance,
tax credits, etc.) [12-14]. Nowadays it is neces-
sary to ascertain high level of ignorance and in-
competence of customers that are expected to
choose environmentally friendly products. First
of all, the signs of ecological quality of products
are not identified by consumers. This fact dem-
onstrates that the environmental safety of pro-
duction and consumption of the product is not
the main evidence of quality because the main
evidence of quality is traditional price and qual-
ity ratio. Secondly, the manufacturers label
products by signs of ecological quality using
mainly the standards of ISO 9000, 14000,
26000. However, the existence of such labels
indicates high quality of the management proc-
ess without revealing the content of characteris-
tics of the ecological quality of the product it-
self.
An essential mark of quality for today can
be compulsory indication on the packaging of
the absence of GMOs in the composition of
products offered in the Ukrainian market. How-
ever, due to the lack of consistency in the sani-
tary requirements of Ukraine and the number of
states that are importers and exporters in the
Ukrainian market, a number of dangerous prod-
ucts enter the Ukrainian market and increase the
volume of trans-boundary pollution. Investment
policy of nature conservation technologies is
replaced by policy of payment fines for breaking
environmental laws, because the amount of pre-
sented fines is hundred times less than the
amount of investment required. Thus, in the
Ukraine we can watch a determinate "imitation"
of environmental consciousness, increase in the
level of irrationality of consumption of natural
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302 ISSN 1562-109X
2013, № 1-2 (61-62)
resources, domination of politics of "quick
money" without taking into account the interests
of future generation.
The present investigation illustrates the
need of simultaneous account of social, eco-
nomic, and ecological characteristics of natural
resources as welfare. This approach allows for-
mulating a model of estimation of interrelation
between the welfare producedand natural re-
sourcesconsumed. The practical application of
the suggested model based on official statistics
permitted establishment of the priority of eco-
nomic component in decision-making in the area
of natural resource management and economy
progress as well as insufficient account of social
and ecological consequences of these decisions.
Further research can be directed towards
new applications and case studies. Adaptation
and application of the proposed model to other
developing countries will likely demonstrate the
flexibility and usefulness of the model in ad-
dressing the trade-off between economic growth
and environment, and can contribute to substan-
tiating policy conclusions that emphasise the
natural resource development, poverty reduc-
tion, and price incentives in advancing both of
these development goals.
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