Analysing the Pattern of Productivity Change in the European Energy Industry

Abstract

For an industry to succeed in a competitive market, it should continuously take care of not only its stakeholders but also its technical efficiency and productivity. In this paper, data envelopment analysis was combined with Malmquist productivity analysis to investigate the pattern of multifactor productivity changes in the European energy industry over the period from 2005–2016. The results showed that the whole industry was technically inefficient and had large potential for improvement. A slight average increase in productivity that was observed over the studied period proved to be sensitive to the financial and economic situation and equally sensitive to technological and efficiency advances. As for efficiency gains, they reflected the nature of the energy industry, implying that they were due to scale efficiencies rather than human resource improvements. Although technological innovation and the optimal scale of production increased productivity, the slow pace at which this occurred and the negative outlook highlighted by the observed trends call for more serious consideration of the future productivity deployment of the European energy industry, particularly in the context of its decarbonisation, diversification, and modernisation.

Sustainability and the Environmental Kuznets Curve Conjecture: An Introduction

“…The final two papers aim at finding tools to reduce carbon emissions in specific countries and for specific sectors. Zhu and Lin [13] evaluate the impact of a carbon tax levied in China's mining industry to promote energy reforms and environmental improvements in traditional industries, while Borozan and Pekanov Starcevic [14] analyze the productivity gains in the European energy industry in light of the climate objectives.…”