Modelling environmental energy efficiency in the presence of carbon emissions: Modified oriented efficiency measures under polluting technology of data envelopment analysis

Abstract

Reductions of carbon dioxide (CO2) emissions and energy consumption are two vital methods contributing in improvement of the environmental energy efficiency. Since data envelopment analysis (DEA) provides a synthetic standardised index of environmental efficiency through considering real factors, such as undesirable outputs and integer-valued data, it has acquired major popularity in environmental energy efficiency. Previous studies regarding applications of oriented DEA models to environmental efficiency did not consider the simultaneous impact of undesirable outputs under the polluting technology and mixed integer-valued data on efficiency measures. The objective of this research is to obtain comprehensive environmental energy efficiency measurements by extending the output-oriented slacks-based measure (SBM) model of Tone (2001) and the output-oriented BCC model of Banker et al. (1984). Thus, new output-oriented SBM and BCC models in mixed integer-valued data and undesirable outputs under the polluting technology are modelled. The models have been utilised to examine scale energy efficiency, pure energy efficiency, output mix-efficiency measure, carbon efficiency, and potential carbon reduction of 30 provinces in China to evaluate their land transportation systems. Additionally, the results are remarkable and interesting compared to those reported in Chang, Zhang, Danao, and Zhang (2013) since many provinces, performed environmental efficiency. There are 12 and 14 provinces, performed environmental output mix-efficiency under CRS and VRS, respectively. Moreover, 50% of the total evaluated provinces performed carbon efficiency. In regard of environmental-inefficient provinces, the proposed efficiency measures showed that provinces produce high levels of carbon emissions have risky potential to save energy.