Environmental efficiency evaluation of Turkish cement industry: an application of data envelopment analysis

Abstract

Carbon dioxide (CO2) is the main determinant to the process of global warming among other greenhouse gases (GHGs). As being responsible for the largest part of the CO2 emissions from industrial activities, the cement sector has an important position for Turkey on the path to achieving CO2 reduction targets. By referencing the relationship between cement industry and CO2 emissions based upon this sector, we aim to analyze environmental efficiency of the Turkish cement industry at firm level and attempt to reveal a comparison study under both output-oriented and non-oriented approaches with the aid of radial and non-radial Data Envelopment Analysis (DEA) models: (i) the output-oriented BCC model; (ii) the output-oriented slack-based measures (SBM) model; (iii) the non-oriented SBM model; and (iv) the non-oriented super-efficiency SBM model. In this context, CO2 emission is considered an undesirable output and relative efficiency of 51 integrated cement factories operating in Turkey for the year 2016 is evaluated. Within the scope of this paper, efficiency scores, reference sets and target values are also determined and a list of measures are proposed. According to the results, only 15.7% of all integrated cement factories are identified as being relatively efficient in all models and a clear imbalance among cement factories in terms of environmental efficiency is determined. Moreover, it is concluded that the output-oriented BCC, output-oriented SBM, and non-oriented SBM models are highly correlated and monotonically related in the presence of undesirable output. The empirical findings also suggest that up to 5.13% CO2 emissions saving can be achieved by taking the necessary precautions.