Abstract
This study discusses a DEA approach for environmental assessment. The proposed approach examines a level of simultaneous achievement on economic prosperity and environmental protection, so measuring the level of “sustainability.” DEA, standing for Data Envelopment Analysis, has been widely applied for performance assessment in the past five decades. A new type of methodology is referred to as “DEA environmental assessment,” and it measures the performance of various organizations that use inputs to produce not only desirable outputs (e.g., electricity) but also undesirable outputs (e.g., CO2 emission). In this study, we discuss various methodological concerns by considering theoretical and empirical difficulties related to the use of DEA environmental assessment. These difficulties include (a) how to incorporate two separated (natural and managerial) disposability concepts into a unified framework of DEA environmental assessment, (b) how to reorganize unified disposability concepts in the proposed approach, (c) how to incorporate an occurrence of undesirable congestion (e.g., a line capacity limit on transmission) and desirable congestion (e.g., possible occurrence of green technology innovation) and (d) how to manage a data set that contains zero and negative values. It is easily expected that these explorations enhance the practicality of DEA environmental assessment.
Highlights
1 Background Intergovernmental Panel on Climate Change (IPCC: http://ipcc.ch/index.htm), established within United Nations (UN) environmental program, reported the policy suggestion in April 2014 that it was necessary for us to reduce an amount of greenhouse gas (GHG) emissions, in particular CO2, by 40–70% until 2050 and to reduce them at the level of almost zero by the end of this twenty-first century via shifting the current systems to energy-efficient ones
As an initial step for such a methodological development applied to corporate sustainability, this study is concerned with a description of difficulties and remedies incorporated in the proposed Data Envelopment Analysis (DEA) environmental assessment
At the end of this section, it is important to confirm that Models (1) and (4) solve the first pitfall related to DEA environmental assessment
Summary
Intergovernmental Panel on Climate Change (IPCC: http://ipcc.ch/index.htm), established within United Nations (UN) environmental program, reported the policy suggestion in April 2014 that it was necessary for us to reduce an amount of greenhouse gas (GHG) emissions, in particular CO2, by 40–70% (compared with 10 years ago) until 2050 and to reduce them at the level of almost zero by the end of this twenty-first century via shifting the current systems to energy-efficient ones. As an initial step for such a methodological development applied to corporate sustainability, this study is concerned with a description of difficulties and remedies incorporated in the proposed DEA environmental assessment. This study does not document any specific application, rather describing methodological strengths and drawbacks of DEA environmental assessment, all of which have not clearly addressed in these previous efforts. Such is a contribution of this study. Sections from 3 to 6 document how the proposed new approach can overcome the pitfalls, discussed in this study, related to DEA environmental assessment.
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