Environment-adjusted regional energy efficiency in Taiwan

This study applies the four-stage DEA procedure to calculate the energy efficiency of 23 regions in Taiwan from 1998 to 2007. After controlling for the effects of external environments, only Taipei City, Chiayi City, and Kaohsiung City are energy efficient. Note that Kaohsiung City reaches the efficiency frontier due to the adjustment via partial environmental factors such as higher education attainment and transport vehicles. We also find a worsening trend for Taiwan’s energy efficiency. Not only is there a gap of energy efficiency between Taiwan’s metropolitan areas and the other regions, but the gap has also widened in recent years. Those inefficient counties should be given priority and the savings potential. Except for road density, the evidence indicates that each environmental factor has partial incremental effects on input slacks. As more cars and motorcycles are unfavorable externalities affecting partial energy efficiency, the central government should help local governments retire inefficient old motor vehicles, encourage energy-saving vehicle models, and provide convenient mass transportation systems. Besides, people with higher education cause industrial energy inefficient in Taiwan. The conscious of effective energy saving is necessary to schools, communities, and employee accordingly.