Abstract
The assessment of performance of water companies is essential for their regulation. In doing so, several variables and models can be employed. This study evaluates and compares the performance of a sample of English and Welsh water companies from the operational, environmental and eco-efficiency perspectives by applying the non-radial data envelopment analysis range adjusted measure model. This methodological approach allows integrating greenhouse gas emissions as undesirable output. The results indicated that the water industry performed well from an operational perspective. However, environmental inefficiency considerably exists which illustrates the difficulties of the water companies in reducing greenhouse gas emissions. The average eco-efficiency was 0.783 which means that while expanding water services, water companies could further reduce costs and carbon emissions by 11.7% on average. Other factors such as water treatment complexity and population density significantly affect water companies’ eco-efficiency. Several policy implications are finally discussed.
Highlights
Water companies are obliged to deliver drinking water according to quality standards defined by the water regulator and safely discharge treated wastewater to the environment using minimum economic costs [1]
It is found that during the years 2011–2018 the mean ECOE was 0.783 which means that costs and carbon emissions could further reduce by 11.7% on average
It is found that water taken from rivers and boreholes, advanced levels of water treatment, population density and the number of treatment works from surface water had a statistically important effect on eco-efficiency
Summary
Water companies are obliged to deliver drinking water according to quality standards defined by the water regulator and safely discharge treated wastewater to the environment using minimum economic costs [1]. Researchers and policy makers have been making efforts to understand the water-energy-GHG nexus because it impacts climate change [4]. Lam et al [5], Lee et al [6] and Wang et al [7] concluded that the energy requirements in water and wastewater production process could potentially increase due to population growth and climate change. Policy makers in several countries around the world set targets in reducing GHG emissions in all sectors in economy including the water sector. The state of Victoria in Australia is committed to reduce GHG to zero by 2050 [9]. The United Kingdom Government is committed that the water sector should cut down its GHG emissions by 80% by 2050 [10]
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