Adaptations of green growth and degrowth in an oil-dependent economy toward a better future

Abstract

Throughout the history of Newfoundland and Labrador (NL), the province has been relying on natural resources as the main sources of economic production. Consequently, NL is prone to external shocks from demand and price fluctuations. For example, the collapse of fisheries during the 1990s and the fall in global oil prices during the 2008 financial crisis have had negative impacts on the NL socioeconomic system, increasing unemployment and out-migration rates. A lack of modeling studies in the literature related to NL natural resources dependency, unemployment, and migration is the motivation for this research. This research focuses on studying the impact of oil, as a major natural resource for NL, dependency on other industries within the economy, employment, and migration through implementing green growth and degrowth policies as an alternative to decoupling the natural resources dependency and shifting away from the region’s historical sources of economic growth. This research links econometric, input-output (IO), and agent-based modeling techniques as a novel combination of methodologies to study the impact of an oil-dependent economy using oil prices and production reduction rates (scenarios of green growth and degrowth) as exogenous variables. The data used in this empirical analysis is obtained from Statistics Canada. The results help create suggestions for policymakers to steer socio-economic policies toward developing their economy for a better future.