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Total-factor Energy Efficiency in EU: Do Environmental Impacts Matter?

Author

Listed:
  • Nela Vlahinic Lenz

    (University of Rijeka, Faculty of Economics and Business, Ivana Filipovica 4, 51000 Rijeka, Croatia,)

  • Alemka egota

    (University of Rijeka, Faculty of Economics and Business, Ivana Filipovica 4, 51000 Rijeka, Croatia,)

  • Dario Maradin

    (University of Rijeka, Faculty of Economics and Business, Ivana Filipovica 4, 51000 Rijeka, Croatia)

Abstract

The concept of total-factor energy efficiency (TFEE) measures energy efficiency in a more superior and complex way within the total-factor framework, but takes only GDP as the only output. A new approach that includes desirable (GDP) and undesirable outputs (GHG emissions) has been developed recently and is applied in our research. The aim of our paper is to assess economy-wide energy efficiency in EU countries in a total-factor framework and compare these results with the environmental total-factor energy efficiency (ETFEE) that takes into account undesirable outputs like CO2 and SOx emissions. Our analysis is based on 2008-2014 panel data for 28 EU countries. The efficiency frontier is constructed by using DEA and modified SBM model based on data on three production factors (labor, capital and energy),GDPas desirable output and CO2 and SOx emissions as undesirable outputs. Our research results show that energy efficiency that does not incorporate environmental pollution is overestimated in 20 out of 28 EU countries. When analyzing environmental TFEE during time, results show that in 2014 there are more countries that have reached efficient frontier than in 2008, which could imply that EU countries pay a lot of attention to reduction of GHG emissions and sustainable development.

Suggested Citation

  • Nela Vlahinic Lenz & Alemka egota & Dario Maradin, 2018. "Total-factor Energy Efficiency in EU: Do Environmental Impacts Matter?," International Journal of Energy Economics and Policy, Econjournals, vol. 8(3), pages 92-96.
    • Handle: RePEc:eco:journ2:2018-03-14
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    References listed on IDEAS

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    Cited by:

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    2. Djula Borozan, 2021. "Technical Efficiency and Productivity Change in the European Union with Undesirable Output Considered," Energies, MDPI, vol. 14(16), pages 1-15, August.
    3. Chen Pei Zhao & Gurgen Gukasyan & Valery Bezpalov & Valeriy Prasolov, 2020. "Development of Modern Standards for Energy Efficiency of Industrial Enterprises within the European Union Policy," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 451-459.
    4. Nelson Amowine & Zhiqiang Ma & Mingxing Li & Zhixiang Zhou & Benjamin Azembila Asunka & James Amowine, 2019. "Energy Efficiency Improvement Assessment in Africa: An Integrated Dynamic DEA Approach," Energies, MDPI, vol. 12(20), pages 1-17, October.
    5. Lai-Wang Wang & Ke-Duc Le & Thi-Duong Nguyen, 2019. "Assessment of the Energy Efficiency Improvement of Twenty-Five Countries: A DEA Approach," Energies, MDPI, vol. 12(8), pages 1-14, April.

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    More about this item

    Keywords

    Total-factor energy efficiency; EU countries; DEA; undesirable outputs; environmental pollution;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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