Separating environmental efficiency into production and abatement efficiency: a nonparametric model with application to US power plants

Separating environmental efficiency into production and abatement efficiency: a nonparametric model with application to US power plants

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Article ID: iaor2014805
Volume: 41
Issue: 3
Start Page Number: 457
End Page Number: 473
Publication Date: Jun 2014
Journal: Journal of Productivity Analysis
Authors:
Keywords: geography & environment, production, management, statistics: empirical
Abstract:

In this paper we present a new approach to evaluate the environmental efficiency of decision making units. We propose a model that describes a two‐stage process consisting of a production and an end‐of‐pipe abatement stage with the environmental efficiency being determined by the efficiency of both stages. Taking the dependencies between the two stages into account, we show how nonparametric methods can be used to measure environmental efficiency and to decompose it into production and abatement efficiency. For an empirical illustration we apply our model to an analysis of US power plants.

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