Using Data Envelopment Analysis to Assess the Relative Efficiency of Different Climate Policy Portfolios

Within the political, scientific and economic debate on climate change, the process of evaluating climate policies ex-ante, during and/or ex-post their lifetime, is receiving increasing attention from international institutions and organisations. The task becomes particularly challenging when the aim is to evaluate strategies or policies from a sustainability perspective. The three pillars of sustainability should then be jointly considered in the evaluation process, thus enabling a comparison of the social, the environmental and the economic dimensions of the policy’s impact. This is commonly done in a qualitative manner and is often based on subjective procedures. The present paper discusses a data-based, quantitative methodology to assess the relative performances of different climate policies, when long term economic, social and environmental impacts of the policy are considered. The methodology computes competitive advantages as well as relative efficiencies of climate policies and is here presented through an application to a sample of eleven global climate policies, considered as plausible for the near future. The proposed procedure is based on Data Envelopment Analysis (DEA), a technique commonly employed in evaluating the relative efficiency of a set of decision making units. We consider here two possible applications of DEA. In the first, DEA is applied coupled with Cost-Benefit Analysis (CBA) in order to evaluate the comparative advantages of policies when accounting for social and environmental impacts, as well as net economic benefits. In the second, DEA is applied to compute a relative efficiency score, which accounts for environmental and social benefits and costs interpreted as outputs and inputs. Although the choice of the model used to simulate future economic and environmental implications of each policy (in the present paper we use the FEEM RICE model), as well as the choice of indicators for costs and benefits, represent both arbitrary decisions, the methodology presented is shown to represent a practical tool to be flexibly adopted by decision makers in the phase of policy design.Climate, Policy, Valuation, Data envelopment analysis, Sustainability

Increasing Sustainability of Logistic Networks by Reducing Product Losses: A Network DEA Approach

This paper considers a multiproduct supply network, in which losses (e.g., spoilage of perishable products) can occur at either the nodes or the arcs. Using observed data, a Network Data Envelopment Analysis (NDEA) approach is proposed to assess the efficiency of the product flows in varying periods. Losses occur in each process as the observed output flows are lower than the observed input flows. The proposed NDEA model computes, within the NDEA technology, input and output targets for each process. The target operating points correspond to the minimum losses attainable using the best observed practice. The efficiency scores are computed comparing the observed losses with the minimum feasible losses. In addition to computing relative efficiency scores, an overall loss factor for each product and each node and link can be determined, both for the observed data and for the computed targets. A detailed illustration and an experimental design are used to study and validate the proposed approach. The results indicate that the proposed approach can identify and remove the inefficiencies in the observed data and that the potential spoilage reduction increases with the variability in the losses observed in the different periods.Ministerio de Ciencia DPI2017-85343-PFondo Europeo de Desarrollo Regional DPI2017-85343-

Efficiency in Public Research Centers: Evaluating the Spanish Food Technology Program

We rely on efficiency analysis to evaluate the Spanish R&D public policy based on financial incentives, and investigate to what extent this instrument has been able to promote a multidimensional research output mix, contributing to the articulation of a successful Spanish Food Innovation System. Introducing the use of the generalized distance function within DEA techniques, we assess whether this policy has encouraged the creation, strengthening and promotion of efficient public research units, whose activities present a balanced and comprehensive production of complementary research outputs −personnel training, science and technology results, and socio-economic collaboration with the private sector. Characterizing the alternative ways in which the different research units have been participating in the Spanish Food Technology Program, and hence their role within the innovation system, we conclude that R&D policy efforts have not succeeded in orienting research units toward a balanced output research mix due to wrong incentives and the lack of a sustained budget that would enable the consolidation of emerging research units. Furthermore, we observe that the majority of research units channel their efforts toward achieving science-technology results related to publications and submitted patents, instead of increasing socio-economic results that would strengthen the articulation and efficiency of the innovation system.Innovation System Management; Research Efficiency; Data Envelopment Analysis

A reasonable benchmarking frontier using DEA : an incentive scheme to improve efficiency in public hospitals

There exists research relating management concepts with productivity measurement methods that offers useful solutions for improving management control in the public sector. Within this sphere, we connect agency theory with efficiency analysis and describe how to define an incentives scheme that can be applied in the public sector to monitor the efficiency and productivity of managers. To fulfill the main objective of this research, we propose an iterative process for determining what we define as a ‘reasonable frontier’, a concept that provides the foundation required to establish the incentive scheme for the managers. Our ‘reasonable frontier’ has the following properties: i) it detects the presence of outliers, ii) it proposes a procedure to establish the influence introduced by extreme observations, and iii) it sorts out the problem of data masking. The proposed method is applied to a sample of hospitals taken from the public network of the Spanish health service. The results obtained confirm the applicability of the proposal made. Summing up, we define and apply a useful method, combining aspects of agency theory and efficiency analysis, which is of interest to those public authorities trying to design effective incentive schemes which influence the decision making of the public managers

The Economic Importance of Draught Oxen on Small Farms in Namibia\u27s Eastern Caprivi Region

The main aim of this study was to analyse and document the value of smallholder farmers’ use of Draught Animal Power (DAP) systems in the Eastern Caprivi Region and to test the economic viability of DAP usage versus using tractors. This study applied Rapid Rural Appraisal techniques (RRA), including a survey. Semi-structured interviews were conducted with 312 farmers at their farms and data was gathered on the use of and economics related to the draught animal power system. Crop enterprise budgets, project reports, expert opinions and group discussions were analysed. The research found that the use of animal power performs better in terms of physical productivity per ha compared to tractor usage. Furthermore, agricultural production in Sibinda village area, with the use of oxen outperformed the other systems when it was evaluated with parametric analysis. From a financial perspective, faremrs in Sibinda and Linyanti using oxen ranked above their counterparts using tractors. Further, the exercise indicated that farmers are facing a multitude of challenges such as damage incurred from wild animals and high input costs. There were many difficulties facing the next generation in entering commericial agricultural production in Caprivi within the current cost-price squeeze environment. Therefore, understanding the role draught oxen power can play as a tool to increase the level of success for new farmers’ in agricultural production and management was noted

Electricity Sector Reform in Developing Countries: A Survey of Empirical Evidence on Determinants and Performance

This paper reviews the empirical evidence on electricity reform in developing countries. We find that country institutions and sector governance play an important role in success and failure of reform; reforms appear to have increased operating efficiency and expanded access to urban customers; they have to a lesser degree passed on efficiency gains to customers, tackled distributional effects, or improved rural access. Moreover, some of the literature is not methodologically robust or on a par with general development economics literature and findings on some issues are limited and inconclusive while some important areas are yet to be addressed. Until we know more, implementation of reforms will be more based on ideology and economic theory rather than solid economic evidence.The World Bank Electricity Research Programme and the CMI Electricity Project (IR-45

Panel I: Connecting 2nd Law Analysis with Economics, Ecology and Energy Policy

The present paper is a review of several papers from the Proceedings of the Joint European Thermodynamics Conference, held in Brescia, Italy, 1–5 July 2013, namely papers introduced by their authors at Panel I of the conference. Panel I was devoted to applications of the Second Law of Thermodynamics to social issues—economics, ecology, sustainability, and energy policy. The concept called Available Energy which goes back to mid-nineteenth century work of Kelvin, Rankine, Maxwell and Gibbs, is relevant to all of the papers. Various names have been applied to the concept when interactions between the system of interest and an environment are involved. Today, the name exergy is generally accepted. The scope of the papers being reviewed is wide and they complement one another well

The political economy of decarbonisation: exploring the dynamics of South Africa’s electricity sector

South Africa’s coal-dominated electricity sector, a key feature of the country’s minerals-energy complex, is in crisis and subject to change. This offers potential opportunities for decarbonisation. Despite positive examples of decarbonisation in South Africa’s electricity sector, such as a procurement programme for renewable energy, there are structural path dependencies linked to coal-fired generation and security of supply. Decarbonisation goes far beyond what is technologically or even economically feasible, to encompass a complexity of political, social and economic factors. Meanwhile, decision-making in electricity is highly politicised and lack of transparency and power struggles in the policy sphere pose key challenges. Such power struggles are reflected in national debates over which technologies should be prioritised and the institutional arrangements that should facilitate them