Abstract
The purpose of this paper is to adjust the measure of eco-efficiency to account for specific sustainability targets at farm level. We assess eco-efficiency and adjust the scores according to a target of absolute levels of greenhouse gas (GHG) emissions, using Data Envelopment Analysis (DEA) and data from Swedish dairy farms as an illustrative example. In particular, the Swedish target of net-zero emissions in 2045 and vision of a fossil free economy are used to specify the GHG emission target used for assessing the adjusted eco-efficiency scores. We test for possible factors associated with the adjusted and unadjusted eco-efficiency using OLS-regression analysis. The study is based on data from the farm accounting data network (FADN) in year 2016 and considers the environmental pressures nutrients and contribution to global warming. Adjusted as well as unadjusted eco-efficiency scores suggest that Swedish dairy farms are highly inefficient, and that economic value added could increase by 64% (adj) or 67% (unadj) for conventional farms and by 42% (adj) or 41% (unadj) for organic farms at the same level of environmental pressure. Findings further suggest that adjusting the scores towards absolute levels of GHG emissions increases industry average efficiency. Comparing the unadjusted and adjusted efficiency scores using Spearman rank correlation indicates similar efficiency rankings between the unadjusted and adjusted scores. However, findings also indicate that adjusted and unadjusted eco-efficiency scores are associated with different influencing factors, which lends empirical support to the idea that the two types of efficiency scores are conceptually different. Policy recommendations can be made based on insights from the second stage analysis of possible influencing factors. In particular, adjusted eco-efficiency is associated with higher intensity of farming defined as output per livestock unit. Further, adjusted eco-efficiency is associated with a higher number of livestock units in conventional farms and with lower levels of labour per livestock unit in organic farms.
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