Measurement of environmental efficiency and productivity: a cross-country analysis

ABSTRACT This paper measures environmental efficiency (EE) and environmental productivity (EP) in 38 countries over the period 1971–92 and analyzes differences in these across countries. It explores several macro-economic factors that could explain these differences, such as income levels and the degree of openness in these countries. The average EE and EP indexes are found to be almost steady over the period 1971–92. In the annex-I countries, an increase in income levels initially leads to an increase in the average EE but subsequently to a decline in EE. In non-annex I countries, EE is increasing over the range of income in these countries. This study also finds an EKC type relationship between EP and per capita GDP in annex-I countries. The degree of openness has a significant positive impact on EE in annex-I countries.

[1]  M. Cropper,et al.  Environmental Economics: A Survey , 1992 .

[2]  Scott E. Atkinson,et al.  Bayesian measurement of productivity and efficiency in the presence of undesirable outputs: crediting electric utilities for reducing air pollution , 2005 .

[3]  R. Färe,et al.  Productivity and quality changes in Swedish pharmacies , 1995 .

[4]  William L. Weber,et al.  Characteristics of a Polluting Technology: Theory and Practice , 2002 .

[5]  M. Ishaq Nadiri,et al.  Some Approaches to the Theory and Measurement of Total Factor Productivity: A Survey , 1970 .

[6]  Surender Kumar,et al.  Environmental and Economic Accounting for Industry , 2005 .

[7]  Andrés J. Picazo-Tadeo,et al.  Is the environmental performance of industrialized countries converging? A ‘SURE’ approach to testing for convergence , 2008 .

[8]  Rolf Färe,et al.  Productivity and Undesirable Outputs: A Directional Distance Function Approach , 1995 .

[9]  Surender Kumar,et al.  Environmental Regulation and Production Efficiency: A Case Study of Thermal Power Sector in India , 2003 .

[10]  A. Krueger,et al.  Trade, Growth, and Poverty: A Selective Survey , 2003, SSRN Electronic Journal.

[11]  E. Neumayer,et al.  Trade Openness, Foreign Direct Investment and Child Labor , 2004 .

[12]  Surender Kumar,et al.  Environmentally Sensitive Productivity Growth: A Global Analysis Using Malmquist-Luenberger Index , 2006 .

[13]  C. Lovell,et al.  Econometric Estimation of Technical and Environmental Efficiency: An Application to Dutch Dairy Farms , 1999 .

[14]  Osman Zaim,et al.  A Kuznets Curve in Environmental Efficiency: An Application on OECD Countries , 2000 .

[15]  A. Jaffe,et al.  Technological Change and the Environment , 2000 .

[16]  Gary Koop,et al.  Carbon dioxide emissions and economic growth: A structural approach , 1998 .

[17]  Di Jin,et al.  Environmental Regulations and Technological Change in the Offshore Oil and Gas Industry: Rethinking the Porter Hypothesis , 2002 .

[18]  R. Färe,et al.  An activity analysis model of the environmental performance of firms—application to fossil-fuel-fired electric utilities , 1996 .

[19]  Osman Zaim,et al.  The role of international trade on environmental efficiency: a DEA approach , 2001 .

[20]  Surender Kumar,et al.  Measuring the cost of environmentally sustainable industrial development in India: a distance function approach , 2002, Environment and Development Economics.

[21]  Russell Pittman,et al.  Multilateral Productivity Comparisons with Undesirable Outputs , 1983 .

[22]  Sushama Murty,et al.  On modeling pollution-generating technologies , 2012 .

[23]  C.A.K. Lovell,et al.  Multilateral Productivity Comparisons When Some Outputs are Undesirable: A Nonparametric Approach , 1989 .

[24]  José Luis Zofío,et al.  Environmental efficiency and regulatory standards: the case of CO2 emissions from OECD industries , 2001 .

[25]  T. Selden,et al.  Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions? , 1994 .

[26]  R. Färe,et al.  Accounting for Air Pollution Emissions in Measures of State Manufacturing Productivity Growth , 2001 .

[27]  Luis R. Murillo-Zamorano.  Economic Efficiency and Frontier Techniques , 2004 .

[28]  M. Cropper,et al.  The Interaction of Population Growth and Environmental Quality , 1994 .