A literature study for DEA applied to energy and environment

Abstract

This study systematically summarizes previous research efforts on Data Envelopment Analysis (DEA) applied to energy and environment in the past four decades, including concepts and methodologies on DEA environmental assessment. Industrial developments are very important for all nations in terms of their economic prosperities. A problem is that the development produces various pollutions on air, water and other types of contaminations, all of which are usually associated with our health problems and climate changes. Thus, it is necessary for us to consider how to make a balance between economic success and pollution mitigation to maintain a high level of social sustainability in the world. It is widely considered that DEA is one of the methodologies to examine the level of sustainability. This study examines a recent research trend on DEA applications from 1980s to 2010s. Nowadays, many researchers have paid serious attention on how to combat various difficulties in the areas of energy and environment. As a result, the number of articles on DEA applications on energy and environment has dramatically increased, particularly after 2000s. However, it is true that DEA has strengths and drawbacks in the applications. Therefore, it is very important for us to carefully use DEA for guiding large policy issues and business strategies such as the global warming and climate change. An underlying premise of this study is that technology innovation in engineering and natural science may solve various problems by linking it with political and managerial efforts. The use of DEA provides a methodological linkage among them, so enhancing the practicality in mitigating problems due to climate change and environmental pollutions. This literature study, along with a summary on conceptual and methodological developments, provides us with guidelines for our future research works on DEA on energy and environment issues.