Characteristics of a polluting technology: theory and practice

Färe, Rolf; Grosskopf, Shawna; Noh, Dong-Woon; Weber, William

doi:10.1016/j.jeconom.2004.05.010

Cited by 792 publications

(568 citation statements)

References 16 publications

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“…Frontier methodologies can provide a composite inefficiency score that represents the observed firm's distance to the best practice eco-efficiency frontier (Charnes et al 1978;Kuosmanen and Kortelainen 2005;Färe et al 1989Färe et al , 2005. The efficiency frontier represents the collection of firms that produce more desirable outputs with fewer inputs and undesirable outputs than the other firms in the sample.…”

Section: Introductionmentioning

confidence: 99%

Measuring Eco-Inefficiency: A New Frontier Approach

Chen

Delmas

2012

Operations Research

151

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Increasing social concerns over the environmental externalities associated with business activities are pushing firms to identify activities that create economic value with less environmental impact and to become more eco-efficient. Over the past two decades, researchers have increasingly used frontier efficiency models to evaluate productive efficiency in the presence of undesirable outputs, such as greenhouse gas emissions. In this paper, we identify critical flaws of existing frontier models and show that under these models eco-inefficient firms can be identified as eco-efficient. We develop a new ecoinefficiency frontier model that rectifies these problems. Our model allows us to calculate, for each firm, an eco-inefficiency score and improvements in outputs necessary to attain eco-efficiency. We demonstrate, through a Monte-Carlo experiment that our eco-inefficiency model provides a more reliable measurement of corporate eco-inefficiency than the existing frontier models. In the simulation experiment we develop a production function of multiple desirable and undesirable outputs that extends the classical Cob-Douglas function of a single output. The multi-output production function allows for greater flexibility in the simulation analysis of frontier models.

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Section: Introductionmentioning

confidence: 99%

Measuring Eco-Inefficiency: A New Frontier Approach

Chen

Delmas

2012

Operations Research

151

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“…In another study, Athanassopoulos et al (1999) took fuel, controllable costs and capital expenditure as inputs; generated pollution and accidents incurred as bad outputs, and electricity produced and plant availability as good outputs while (Burnett and Hansen, 2008) deployed capital, fuel costs, and operating costs as inputs, SO2 emission as bad output and generated power as good output. In a very similar study to ours, Färe et al (2005) employed labor, installed capacity, and fuel as inputs and SO2 emission and generated power as undesirable and desirable outputs, respectively. More recently, Sueyoshi and Goto (2011) used generation capacity, number of employees, coal, oil, and LNG 9 as inputs, CO2 emission as bad output and generation as good output for their study.…”

Section: Operational Availability/ Deviation From Generation Planmentioning

confidence: 96%

A new slacks-based measure of Malmquist–Luenberger index in the presence of undesirable outputs

Arabi

Munisamy

Emrouznejad

2015

Omega

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“…8 See, e.g. Coggins and Swinton (1996); Färe et al (1989Färe et al ( , 1993Färe et al ( , 2005; Grosskopf (1996) Førsund (2009,2016) points out the assumption of weak-disposability by using single trade-off between desirable and undesirable outputs is still in conflict with the material balance principle even abatement is explicitly introduced. Murty et al (2012) indicate the property of the weak-disposability approach might result in counterintuitive implications for trade-offs between inputs, good outputs and bad outputs.…”

Section: Motivationmentioning

confidence: 99%

Measurement of production efficiency and environmental efficiency in China’s province-level: a by-production approach

Zhao

2016

Environ Econ Policy Stud

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This thesis employs the by-production approach to modelling pollution generating technologies to investigate production and environmental efficiencies, design consumptionincreasing and emission non-increasing input policy reforms, and derive a measure of marginal abatement costs in the case of China.The second chapter introduces by-production approach to modelling the pollution generating technologies. It decomposes a general pollution generating technology as classical intended production technology and nature's residual-generation mechanism. In this chapter, some production and environmental efficiency indexes will be extended and applied under by-production approach to study China's regional technical efficiency incorporated emission generation. According to our estimation results, some reasons analysis and policy implementation suggestions are given.The third chapter co-authored with Professor Sushama Murty proposes a model that gives a key role to the energy sector, and gives a theoretical characterisation for the existence of feasible, consumption-increasing, and emission-non increasing input policy reforms at the status-quo of a national or a sub-national economic unit. A methodology is developed to empirically test for the existence of such efficiency-improving reforms.Formulae to compute the optimal efficiency-increasing reform and a measure of marginal abatement cost (MAC) based on local policy reforms using data available at the status-quo are derived.The fourth chapter co-authored with Professor Sushama Murty implements the methodology developed in the third chapter to test the existence and to study the structure of efficiency-improving reforms using data on thirty provinces in China. A new class of limitational variable elasticity of substitution (LVES) production functions for specifying technologies of the energy-using and energy-generating sectors is introduced and two such production functions are estimated along with the conventional Cobb Douglas and 3 CES production functions. MACs and the optimal efficiency-improving reforms are found to be sensitive to the choice of the production functions employed. There is a huge variation in MACs across provinces. The optimal efficiency-improving reform encourages a substitution from coal-fired electricity generation to gas-fired electricity and renewable energy generation for all provinces.The fifth chapter reviews China's regional variations in electricity generation, primary energy usage, and forest cover. To better understand the China's carbon emission control policies, we also briefly introduce the carbon emission scheme implementation. Based on these information, we incorporate the efficiency-improving reforms and MACs estimated in the fourth chapter to analyse the direction of input resources reallocation and give further recommendations for each province.4

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Characteristics of a polluting technology: theory and practice

Cited by 792 publications

References 16 publications

Measuring Eco-Inefficiency: A New Frontier Approach

Measuring Eco-Inefficiency: A New Frontier Approach

A new slacks-based measure of Malmquist–Luenberger index in the presence of undesirable outputs

Measurement of production efficiency and environmental efficiency in China’s province-level: a by-production approach

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