--- canonical_url: "https://csls.ca/ipm-archive/ipm-issue-47/eroding-natural-capital-an-alternative-explanation-for-the-secular-decline-in-productivity-growth/" title: "Eroding Natural Capital: An Alternative Explanation for the Secular Decline in Productivity Growth" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-13T08:15:25+00:00" date_modified: "2026-07-17T10:00:58+00:00" post_type: "ipm" summary: "" ipm_issue_period: - "Fall 2024" ipm_keyword: - "biodiversity" - "Caron" - "climate" - "environmental" - "global" - "MFP" - "natural capital" - "productivity" - "secular decline" ipm_research_theme: - "Well-being and living standards" ipm_country_focus: - "Global" - "International" featured_image: "https://csls.ca/wp-content/uploads/2026/06/IPM_50_banner.webp" status: "publish" --- # Eroding Natural Capital: An Alternative Explanation for the Secular Decline in Productivity Growth Canonical URL: https://csls.ca/ipm-archive/ipm-issue-47/eroding-natural-capital-an-alternative-explanation-for-the-secular-decline-in-productivity-growth/ # Eroding Natural Capital: An Alternative Explanation for the Secular Decline in Productivity Growth [Download full PDF article](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-47-6-Caron.pdf) Cite this article × Cite this article as: Caron, Christina. 2024. “Eroding Natural Capital: An Alternative Explanation for the Secular Decline in Productivity Growth.” International Productivity Monitor, No. 47 (Fall 2024): 109–147. https://csls.ca/ipm-archive/ipm-issue-47/eroding-natural-capital-an-alternative-explanation-for-the-secular-decline-in-productivity-growth/ ## Author: - Christina Caron Centre for the Study of Living Standards (CSLS) ## IPM Issue 47 Fall 2024 pp. 109–147 ## Related IPM articles [The Relationship between Efficiencies Defenses for Mergers and TFP Growth Robin Shaban Fall 2025 | IPM Issue 49 | pp. 82–102](https://csls.ca/ipm-archive/ipm-issue-49/the-relationship-between-efficiencies-defenses-for-mergers-and-tfp-growth/) [Adult Skills and Productivity: New Evidence from PIAAC 2023 Dan Andrews, Balázs Égert, Christine de La Maisonneuve Fall 2025 | IPM Issue 49 | pp. 41–63](https://csls.ca/ipm-archive/ipm-issue-49/adult-skills-and-productivity-new-evidence-from-piaac-2023/) [The Potential Impact of Pro-competitive Regulatory Reforms on Productivity and Growth in Canada Gilbert Cette, Jimmy Lopez, Giuseppe Nicoletti, Océane Vernerey Fall 2025 | IPM Issue 49 | pp. 3–40](https://csls.ca/ipm-archive/ipm-issue-49/the-potential-impact-of-pro-competitive-regulatory-reforms-on-productivity-and-growth-in-canada/) [Appendix: UK Productivity Growth Rates Across Data Vintages and Studies Josh Martin Spring 2025 | IPM Issue 48 | pp. 65–73](https://csls.ca/ipm-archive/ipm-issue-48/appendix-uk-productivity-growth-rates-across-data-vintages-and-studies/) [Opportunities and Risks of Artificial Intelligence for Productivity Francesco Filippucci, Peter Gal, Katharina Laengle, Matthias Schief, Filiz Unsal Spring 2025 | IPM Issue 48 | pp. 1–26](https://csls.ca/ipm-archive/ipm-issue-48/opportunities-and-risks-of-artificial-intelligence-for-productivity/) [Using Ecosystem Accounting to Integrate the Environment in Measures of Multifactor Productivity Carl Obst Fall 2024 | IPM Issue 47 | pp. 87–108](https://csls.ca/ipm-archive/ipm-issue-47/using-ecosystem-accounting-to-integrate-the-environment-in-measures-of-multifactor-productivity/) [How Does Industrial Policy Impact Output, Hours and Productivity? 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Catherine Mann Fall 2024 | IPM Issue 47 | pp. 3–19](https://csls.ca/ipm-archive/ipm-issue-47/could-domestic-industrial-policies-even-with-global-fragmentation-revive-productivity/) [Productivity and Industrial Policy by Design: The UK Experience Diane Coyle, Ayantola Alayande Fall 2024 | IPM Issue 47 | pp. 20–38](https://csls.ca/ipm-archive/ipm-issue-47/productivity-and-industrial-policy-by-design-the-uk-experience/) ## Abstract ## Résumé EN FR Copy link Email LinkedIn Labour productivity and multifactor productivity (MFP) growth rates have been declining in advanced economies for several decades, and the decline in labour productivity growth has extended to emerging economies over the past fifteen years. Global MFP growth has flatlined since 2007 in both advanced and emerging economies. While many explanations for these trends have been advanced, no clear consensus has yet emerged. However, the pervasive and persistent nature of the declines signals that factors of global scope and extended duration are likely implicated. This article presents an alternative explanation for declining productivity growth: that the erosion of natural capital has been occurring on a sufficiently large scale globally to exert significant and growing downward pressure on productivity growth. Accordingly, a fundamental transformation in the economic role of natural capital has taken place, from productivity accelerator to productivity decelerator. These effects have been obscured due to the absence of natural capital from conventional economic frameworks and production functions. Les taux de croissance de la productivité du travail et de la productivité multifactorielle (PMF) sont en déclin dans les économies avancées depuis plusieurs décennies, et le recul de la croissance de la productivité du travail s’est étendu aux économies émergentes au cours des quinze dernières années. La croissance mondiale de la PMF stagne depuis 2007 dans les économies avancées et émergentes. Si de nombreuses explications à ces tendances ont été avancées, aucun consensus clair n’a encore émergé. Cependant, la nature généralisée et persistante des reculs indique que des facteurs de portée mondiale et de longue durée sont probablement en cause. Cet article présente une explication alternative du déclin de la croissance de la productivité : l’érosion du capital naturel à une échelle suffisamment grande pour exercer une pression à la baisse significative et croissante sur la productivité. [Download full PDF](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-47-6-Caron.pdf)