Eco-efficiency measurement and material balance principle:an application in power plants Malmquist Luenberger Index

Incorporating Material Balance Principle (MBP) in industrial and agricultural performance measurement systems with pollutant factors has been on the rise in recent years. Many conventional methods of performance measurement have proven incompatible with the material flow conditions. This study will address the issue of eco-efficiency measurement adjusted for pollution, taking into account materials flow conditions and the MBP requirements, in order to provide ‘real’ measures of performance that can serve as guides when making policies. We develop a new approach by integrating slacks-based measure to enhance the Malmquist Luenberger Index by a material balance condition that reflects the conservation of matter. This model is compared with a similar model, which incorporates MBP using the trade-off approach to measure productivity and eco-efficiency trends of power plants. Results reveal similar findings for both models substantiating robustness and applicability of the proposed model in this paper

Estimation of Marginal Abatement Cost of Air Pollution in Durgapur City of West Bengal

Air pollution in industrial cities with emissions from firms is a growing problem in India. Durgapur, one of the growing industrial cities in eastern India, covering a host of industries, suffers from similar problems. The paper estimates the marginal abatement cost of air pollution of industries in Durgapur, West Bengal. We model the technology of a firm with output-distance function. Here the linear programming approach is adopted to estimate the shadow prices and distance values. Results reveal that there is a wide variation in shadow prices of Suspended Particulate Matter and distance values between firms under particular category of industries thus indicating the variability in the degree of compliance, use of resources and the vintages of capital. In this context the paper suggests policies for air quality management in urban industrial areas of West Bengal which will help to achieve sustainable industrial development.Output Distance Function, Shadow Prices, Distance Values

A material balance approach for modelling banks’ production process with non-performing loans

The aim of this to study is to examine how non-performing loans on the balance sheets of Japanese banks affect their performance by adopting a material balance principle. The paper outlines how the material balance conditions can be applied when modelling banks’ production process in the presence of non-performing loans. The paper utilizes the generalized weak G-disposability principle which accounts for the heterogeneity among banks’ input quality. We test how an input-oriented model (non-performing loans are treated as an input), the weak disposability assumption and the adopted material balance approach, affect banks’ performance levels. We apply our test on a sample of Japanese banks over the period 2013 to 2019. Our findings indicate that the input-oriented model and the material balance estimator even if they present similar distributions, they account differently the effect of non-performing loans’ fluctuations over the examined period. In addition, the results under the weak disposability assumption are found to be different compared to the material balance measures and less sensitive to banks’ non-performing loans variation levels. We also provide evidence that the generalized weak G-disposability assumption captures better banks’ performance fluctuations that has been caused by the restructuring of the Japanese banking industry

Reconciling energy and carbon emission performance for sustainability

Enerji ve çevresel verimlilik kavramları üretim süreci esnasında çok az ya da hiç kirlilik açığa çıkmamasını sağlayarak verimliliği yeniden tanımlar ve sürdürülebilir bir geleceğe erişimi sağlar. Konuyla ilgili literatür ülkelerin çevresel verimlilik ve performans ölçümlerinin sağlanması konusunda yeterli değildir. Bu çalışma, elektrik enerjisi üretiminde enerji ve CO2 salımı performansını üretim verimliliği açısından modeller. Bu çalışmada radyal olmayan mesafe fonksiyonu kullanılmış; enerji, çevre ve enerji-çevre performans indisleri 112 ülke için ve 1988-2011 periyotlarını kapsayacak şekilde oluşturulmuştur. Model IEA 2013 datasını kullanarak GAMS 23.5 programında çözülmüştür. Ülkeler, ilk etapta birleşik ısı ve güç üretim (CHP) teknolojisini kullanımlarına göre gruplanmış ve en iyi üretim sınır eğrisi oluşturulmuştur. İkinci grup ise G20 ülkelerinden oluşmakta olup, bu gruplama dünyadaki 20 majör ülkenin enerji, çevre ve enerji-çevre performanslarının karşılaştırılmasını sağlamaktadır. Son grup ise Türkiye'nin de içinde bulunduğu Birleşmiş Milletler İklim Değişikliği Çerçeve Sözleşmesi (UNFCCC) Ek I ülkelerinden oluşmaktadır. Data setteki en son yıl olan 2011 yılı için tüm performans indislerinde en iyi performans gösteren ülkeler şunlardır: CHP teknolojisini kullanan ülkeler arasında İsviçre ve İsveç; CHP teknolojisini kullanmayan ülkeler arasında Brezilya; G20 ülkeleri arasında Brezilya ve İngiltere; Ek I ülkeleri arasında ise Beyaz Rusya ve Slovak Cumhuriyeti. Literatürle uyumlu olarak Türkiye, kirliliğe sebep olan ana ülkelere göre daha iyi enerji ve çevresel performans sergilemiş olup, Ek I örneklem ülkeleri arasında ise medyanda yer almaktadır. Anahtar Kelimeler: Enerji Verimliliği, Çevresel Verimlilik, CO2 Salım Performansı, Elektrik Üretimi, Yönsel Mesafe Fonksiyonu, Veri Zarflama AnaliziThe concepts of energy and environmental efficiency, with creating less or no pollution in production processes, help to redefine efficiency in general and serve to attain a sustainable future. The relevant literature is underprovided in analyzing environmental efficiency and thus performance measures for countries over time. This study models energy and CO2 emission performance in electricity generation from the production efficiency point of view. It uses a non-radial directional distance function and constructs energy, environmental and energy-environmental performance indices for 112 countries over the period of 1988-2011. The models are run in GAMS 23.5 with IEA data 2013. The countries are grouped firstly with respect to their use of combined heat and power (CHP) technology to construct best practice frontier. The second group is G20 countries, which allows investigation of the tradeoffs amongst energy and environmental performances of top 20 countries in the world. The last group is UNFCCC Annex I countries, consisting of Turkey. The study shows that the majority of the countries still have room for improvement for energy and the environment. For the most current year in the dataset, 2011, for all the indices, the following countries are the best performers; Switzerland and Sweden in the group of countries with CHP technology, Brazil for the non-CHP countries, Brazil and United Kingdom among G20 countries, and Belarus and Slovak Republic in Annex I. Consistent with the literature, Turkey has better energy and environmental performance compared to the major polluters as it performs around the medians of sample countries in UNFCCC Annex I. Keywords: Energy efficiency, Environmental efficiency, CO2 emission performance, Electricity Generation, Directional distance function, Data envelopment analysis

Efficiency, Productivity and Environmental Policy: A Case Study of Power Generation in the EU

This study uses the EU public power generating sector as a case study to investigate the environmental efficiency and productivity enhancing performance of the European Union’s CO2 Emissions Trading Scheme (EU ETS) in its pilot phase. Using Data Envelopment Analysis methods, we measure the environmental efficiency and the productivity growth registered in public power generation across the EU over the 1996-2007 period. In the second stage of our analysis we attempt to explain changes in productivity and efficiency over time using state-of-the-art econometric techniques. Our analysis suggests two conclusions: on the one hand carbon pricing led to an increase in environmental efficiency and to a shift outwards of the technological frontier; on the other hand, the overly generous allocation of emission permits had a negative impact on both measures. These results are shown to be robust to changes in controls and specifications.Emissions Trading, EU ETS, Environmental Efficiency, Productivity Growth, Data Envelopment Analysis

Efficiency, Productivity and Environmental Policy: A Case Study of Power Generation in the EU

This study uses the EU public power generating sector as a case study to investigate the environmental efficiency and productivity enhancing performance of the EU ETS in its pilot phase. Using Data Envelopment Analysis methods, we measures the environmental efficiency and the productivity growth registered in public power generation across the EU over the 1996-2007 period. In the second stage of our analysis we attempt to explain changes in productivity and efficiency over time using state-of-the-art econometric techniques. Our analysis suggests two conclusions: on the one hand carbon pricing led to an increase in environmental efficiency and to a shift outwards of the technological frontier; on the other hand, the overly generous allocation of emission permits had a negative impact on both measures. These results are shown to be quite robust to changes in controls and specifications.Emissions Trading; EU ETS; Environmental Efficiency; Productivity GrowthM; Data Envelopment Analysis

On the opportunity cost of crop diversification

Distance functions are increasingly being augmented, with environmental goods treated as conventional outputs. A common approach to evaluate the opportunity cost of providing an environmental good is the exploitation of the distance function's dual relationship to the value function. This implies that the opportunity cost is assumed to be non‐negative. This approach also requires a convex technology set. Focusing on crop diversification for a balanced sample of 44 cereal farms in the East of England for the years 2007–2013, this paper develops a novel opportunity cost measure that does not depend on these strong assumptions. We find that the opportunity cost of crop diversification is negative for most farms

Carbon emissions intensity reduction target for China's power industry: An efficiency and productivity perspective

© 2018 Elsevier Ltd This paper proposes a scenario analysis to address whether the national and provincial CO2 emissions intensity reduction target during 2016–2020 would be achievable for China's power industry with the identification of change on carbon productivity. This productivity indicator is further decomposed to investigate contributions of different sources to productivity growth when there exists technological heterogeneity. Evaluation results show that even if all electricity-generating units in each region were able to adopt the best practice, the nationwide 18% intensity reduction target is not feasible through improving technical efficiency or upgrading technology on electricity generation and carbon abatement in a short or medium term. The existence of regional technological heterogeneity in power generation and associated CO2 emissions reduction processes implies the necessity of more differentiated regulations and policies for emission reduction across China's regions and inter-regional technology transfer. The emerging national emission trading scheme could easy some challenges in formulating emission policy for heterogeneous regions

Transit Costs and Cost Efficiency: Bootstrapping Nonparametric Frontiers.

This paper explores a selection of recently proposed bootstrapping techniques to estimate non-parametric convex (DEA) cost frontiers and efficiency scores for transit firms. Using a sample of Norwegian bus operators, the key results can be summarised as follows: (i) the bias implied by uncorrected cost efficiency measures is numerically important (close to 25%), (ii) the bootstrapped-based test rejects the constant returns to scale hypothesis (iii) explaining patterns of efficiency scores using a two-stage bootstrapping approach detects only one significant covariate, in contrast to earlier results highlighting, e.g., the positive impact of high-powered contract types. Finally, comparing the average inefficiency obtained for the Norwegian data set with an analogous estimate for a smaller French sample illustrates how the estimated differences in average efficiency almost disappear once sample size differences are accounted for.