Environmental Efficiency in Agricultural Sector

Abstract

Agriculture is an important and vital sector in Iran’s economy. This sector provides basic needs along with undesirable outputs such as greenhouse gases. Greenhouse gas (GHG) emissions are main causes of environmental pollution. By considering the pollution in production process, economic performance can be evaluated precisely. We can modify the efficiency model using the desirable and undesirable outputs to improve the quality of the environment, and to achieve sustainable development. In this regard, environmental efficiency of agriculture is an appropriate guide to produce crops using low inputs and environmental pollution. This study aims to estimate the agricultural environmental efficiency in Iran’s different provinces using data envelopment analysis (DEA) method. The results show that for each billion Rial of agriculture gross value added, 11.39 tons of carbon dioxide are produced. Subsequently, regarding the greenhouse gas emissions caused by proportional agricultural activity, the provinces are divided into three clusters. Mean carbon dioxide emission for each cluster is 536,663.7, 804,315.7, and 186,311.8 tons, respectively. Mean environmental efficiency for clusters is 0.294, 0.243, and 0.836, respectively. This indicates that provinces with more greenhouse gas emissions have lower environmental efficiency. In this regard, the politicians should make the less efficient clusters to reduce the use of undesirable inputs to decrease the pollutant emissions. Besides, by proper allocation of capital, the more efficient cluster can improve environmental technologies.