ECONOMIC ACTIVITY EFFICIENCY IN THE CONTEXT OF CONTEMPORARY GLOBAL CHALLENGES AND SUSTAINABLE DEVELOPMENT

2024;
: 149-164
1
International Institute-association of Regional Ecological Problems
2
Lviv Polytechnic National University
3
Ukrainian National Forestry University

Purpose. The purpose of this study is to deepen the understanding and further development of theoretical approaches to evaluating the efficiency of economic activity, which will serve scientists and politicians to justify the choice of methods of evaluation, taking into account the nature of the object of evaluation and the context of this process. The research objectives follow from this: to analyze the correctness of using market prices to determine the efficiency of economic activity and to propose methods of adjustment.

Design/methodology/approach. In the article, the authors investigated methodological the basics which are methods of system and comparative analysis, cost-benefit analysis, and multi-criteria methods, which were used to develop a holistic approach to performance evaluation. The informational basis of the study was made up of scientific domestic and foreign publications, as well as the authors’ own long-term experience of research work in the field of ecological economics.

Findings. Today, many approaches to evaluating economic efficiency have been developed. However, all of them have strengths and weaknesses, so the question of the correctness of using these approaches requires further research. We suggest differentiating approaches to performance evaluation as follows. If decisions are made at the global or regional level and are of a strategic and/or irreversible nature or are associated with unrecognizability, then it is necessary to be guided by communicative (social) rationality and apply deliberative methods. In these cases, methods based on individual assessments are advisory. If we are talking about insignificant local influences and market-valued goods, then individual rationality and analytical decision-making methods will be relevant.

Practical implications. The results of this research are of interest to economists and politicians. Proposed logic of cost-benefit analysis, the conceptual model of the ecological economy, positioning of approaches to determining efficiency according to two features: rationality and the nature of the goodwill that seek to improve the adaptation of their marketing communication strategy to meet the conditions of digitalization and tostrengthen their competitive foothold within the market. Also, the findings can help to improve economic activity efficiency in the context of contemporary global challenges and Sustainable Development.

Originality/value. Based on the results of the analysis of the features of economic activity evaluation, determined by the subject and context of evaluation, as well as the choice of the evaluation methods themselves, a new paradigm of efficiency evaluation is proposed by differentiating its approaches taking into account the essence of the evaluated activity, the context of evaluation and the corresponding rationalities and tools. This paradigm, in response to modern challenges, allows expanding the subject area of economic science and overcoming the methodological limitations of monetary estimates

1. Richardson, K., Steffen, W., Lucht, W., Bendtsen, J., Cornell, S. E., Donges, J. F., ... & Rockström, J. (2023). Earth beyond six of nine planetary boundaries. Science advances, 9(37), eadh2458.
https://doi.org/10.1126/sciadv.adh2458
2. Tunytsya, Y. Y. (2012). About the concept of encouraging an environmentally safe economy. Visnyk of the National Academy of Sciences of Ukraine, 5, 26-29 (in Ukrainian).
3. Zahvoyska, L.D., Pelyukh, O.R. (2019). Epistemological instruments for ecological-economic systems investigation. Proceedings of the Forestry Academy of Sciences of Ukraine, 18, 154-163 (in Ukrainian). DOI: https://doi.org/10.15421/411916.
https://doi.org/10.15421/411916
4. Fussler, C., James, P. (1996). Driving eco-innovation: a breakthrough discipline for innovation and sustainability. Pitman Publishing.
5. Steffen, W., Richardson, K., Rockström, J., Cornell, S. E., Fetzer, I., Bennett, E. M., ... & Folke, C. (2015). Planetary boundaries: Guiding human development on a changing planet. Science, 347 (6223), 1259855. DOI: 10.1126/science.1259855.
https://doi.org/10.1126/science.1259855
6. Daly, H. (1991). From empty-world economics to full-world economies: Recognizing an historical turning point in economic development. In Goodland, R., Daly, H., Serafy, S.E. (Eds.). Environmentally Sustainable Economic Development: Building on Brundtland. Environment Working Paper, No. 46, 18-26.
7. Crutzen, P. J., Stoermer, E. F. (2000). The 'Anthropocene'. Global Change Newsletter, 41, 17-18.
8. Zahvoyska, L. D. (2014). Conceptualising of eco-innovations in the context of recent ecological-economic discourse. Odessa National University Herald. Economy, 19, 2(5), 17-20 (in Ukrainian).
9. Tunytsya, Y.Y. (2006). Ecological economy and market: Contradictions overcoming. Kyiv: Znannya (in Ukrainian).
10. Khvesyk, M., Bystryakov, I. (2012). Paradigmatic view of the concept of sustainable development of Ukraine. Economy of Ukraine, 6, 4-12 (in Ukrainian).
11. World Environmental Constitution. Methodological Foundation (2014). Edited by Prof., Dr. Y. Tunytsya. Translated for the Ukrainian edition with minor amendments and additions. Lviv: Ukrainian National Forestry University Press.
12. Tupytsya, Y. Y. (1976). Economic problems of the integrated use and protection of forest resources. Lviv, Vyshcha shkola (in Russian).
13. Tunytsya, Y. Y., Zahvoyska, L. D., Adamovskyi, O. M. (2016). Education for Sustainable Development: Economic Discourse. Viŝa škola, 4(74), 107-127 (in Ukrainian).
14. Synyakevych, I. M. (Ed.). (2008). Forest Policy: Theory and Practice. Lviv: Pyramid (in Ukrainian).
15. Melnik, L. G., Degtyaryova, I. B. (2010). Synergetic basis of marketing innovations. Marketing and Management of Innovations, 1, 67-77 (in Ukrainian).
16. Degtyaryova, I. B. (2009). Taking into account external effects in the calculation of synergistic results in ecological-economic systems. Mechanism of Economic Regulation, 1, 52-62 (in Ukrainian).
17. KPMG (2012). Expect the Unexpected: Building business value in a changing world. URL: http://www.kpmg.com (Last assessed: 02.02.2020).
18. Callan, S. J., Thomas, J. M. (2013). Environmental economics and management: Theory, policy, and applications. Mason, Cengage Learning.
19. Boardman, A. E., Greenberg, D. H., Vining, A. R., & Weimer, D. L. (2018). Cost-benefit analysis (5th ed.). Cambridge: Cambridge Books.
https://doi.org/10.1017/9781108235594
20. Hanley, N., Spash, C. (1998). Cost-benefit Analysis and the Environment. Cheltenham: Edward Elgar.
21. Dixon, J., Scura, L., Carpenter, R., Sherman, P. (2013). Economic analysis of environmental impacts. London, Earthscan.
https://doi.org/10.4324/9781315070438
22. Zahvoyska, L.D., Lazor, O.Ya., Lazor, O.D. (2007). Approaches and methods to the estimation of the influence of projects on the environment. Economy of Ukraine, 3, 80-89 (in Ukrainian).
23. Zahvoyska, L., Pelyukh, O., Maksymiv, L. (2017). Methodological considerations and their application for evaluation of benefits from the conversion of even-age secondary Norway spruce stands into mixed uneven-aged woodlands with a focus on the Ukrainian Carpathians. Austrian Journal of Forest Science, 134, 251-281.
24. EC (2014). Guide to Cost-benefit analysis of investment projects. Economic appraisal tool for Cohesion Policy 2014-2020. Luxembourg, Publications Office of the European Union.
25. Pelyukh, O.R., Zahvoyska, L.D. (2018). Investigation of Lviv region population's preferences regarding recreational forests using choice experiment method. Scientific Bulletin of UNFU, 28(9), 73-80 (in Ukrainian). DOI: https://doi.org/10.15421/40280915.
https://doi.org/10.15421/40280915
26. Costanza, R., De Groot, R., Sutton, P., Van der Ploeg, S., Anderson, S. J., Kubiszewski, I., ... Turner, R. K. (2014). Changes in the global value of ecosystem services. Global Environmental Change, 26, 152-158. DOI: http://dx.doi.org/10.1016/j.gloenvcha.2014.04.002.
https://doi.org/10.1016/j.gloenvcha.2014.04.002
27. Vatn, A. (2009). An institutional analysis of methods for environmental appraisal. Ecological Economics, 68(8-9), 2207-2215.
https://doi.org/10.1016/j.ecolecon.2009.04.005
28. Funtowicz, S., Ravetz, J. R. (1993). Science for the post-normal age. Futures, 25, 735-755.
https://doi.org/10.1016/0016-3287(93)90022-L
29. Farley, J., Erickson, J. D., Daly, H. E. (2005). Ecological economics: a workbook for problem-based learning. Washington: Island Press.
30. Zahvoyska, L.D. (2011). Philosophical-economic discourse of the problem "Man-Nature". In Sustainable development and ecological security of society: theory, methodology, practice (ed. Ye. Khlobystov). Simferopolʹ, VD "ARIAL", 12-41 (in Ukrainian).
31. Zahvoyska, L. D. (2005). Recent trends of ecological economics investigations. Scientific Bulletin of UNFU, 15(6), 136-143 (in Ukrainian).
32. Bogdanov, A. A. (1989). Tektologiya (General organizational science). Moscow: Economy (in Russian).
33. Mochernyy, S. V. (ed.). (2000). Economic encyclopedia. Kyiv: Publishing Center "Akademiya" (in Ukrainian).
34. Tunytsya, Y. Y. (ed.). (2014). Forestry terminology dictionary: Ukrainian, Russian, English. Kyiv: Piramida (in Ukrainian).
35. Saaty, T. L. (2001). Decision making with dependence and feedback. The analytic network process. 2nd ed. Pittsburgh: RWS Publications.
36. Kangas, A., Kangas, J., Kurtilla, M. (2007). Decision support for forest management. Heidelberg: Springer.
37. Zahvoyska, L. D., Debrynyuk, Y. M., Shvedyuk I. V. (2011). Ecological-economic efficiency of alternative approaches to forestation. Proceedings of the Forestry Academy of Sciences of Ukraine, 9, 162-167 (in Ukrainian).
38. Fedoruk, M. I. (2018). Multi-criteria analysis of investment efficiency in energy saving: an analytic hierarchy process approach. Bulletin of the National University of Water and Environmental Engineering. Economic series, 2(82), 323-334 (in Ukrainian).
39. Zahvoyska, L. D., Makar, V. V. (2010). Multicriteria dynamic model of forest stand reconstruction process management. Proceedings of the Forestry Academy of Sciences of Ukraine, 8, 182-187 (in Ukrainian).
40. Zahvoyska, L. D., Shvedyuk, I. V. (2014). Optimization of reforestation strategy using A'WOT method with a focus on sustainable development: Male Polissya case study. Visnyk of the Lviv University. Economic series, 51, 136-145 (in Ukrainian).
41. Zografos, C., Howarth, R. B. (2010). Deliberative ecological economics for sustainability governance. Sustainability, 2(11), 3399-3417.
https://doi.org/10.3390/su2113399
42. Voinov, A., Kolagani, N., McCall, M. K., Glynn, P. D., Kragt, M. E., Ostermann, F. O., ... Ramu, P. (2016). Modelling with stakeholders - Next generation. Environmental Modelling & Software, 77, 196-220.
https://doi.org/10.1016/j.envsoft.2015.11.016
43. Stirling, A. (2006). Analysis, participation and power: justification and closure in participatory multicriteria analysis. Land Use Policy, 23, 95-107.
https://doi.org/10.1016/j.landusepol.2004.08.010
44. Rauschmayer, F., Wittmer, H. (2006). Evaluating deliberative and analytical methods for the resolution of environmental conflicts. Land Use Policy, 23, 108-122.
https://doi.org/10.1016/j.landusepol.2004.08.011
45. Habermas, J. (2000). On the pragmatics of communication. Cambridge: the MIT Press.
46. Zahvoyska, L., Bas, T. (2007). Preferences of L'viv region population regarding forest ecosystems services. Scientific Bulletin of UNFU, 17(7), 96-104 (in Ukrainian).
47. Tunytsya, Y. (2020). Pipe once, pipe two… And to the Baltic ecosystem - "pipe"? URL: https://dt.ua/gazeta/issue/1158. (Last accessed: 02.02.2020) (in Ukrainian).
48. Spash, C. L. (2007). Deliberative monetary valuation (DMV): Issues in combining economic and political processes to value environmental change. Ecological Economics, 63(4), 690-699.
https://doi.org/10.1016/j.ecolecon.2007.02.014