IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v18y2021i6p2831-d514516.html
   My bibliography  Save this article

Eco-Efficiency of the English and Welsh Water Companies: A Cross Performance Assessment

Author

Listed:
  • Ramon Sala-Garrido

    (Department of Mathematics for Economics, University of Valencia, 46010 Valencia, Spain)

  • Manuel Mocholi-Arce

    (Department of Mathematics for Economics, University of Valencia, 46010 Valencia, Spain)

  • Maria Molinos-Senante

    (Departamento de Ingeniería Hidráulica y Ambiental, Pontificia Universidad Católica de Chile, 4860 Santiago, Chile)

  • Michail Smyrnakis

    (Hartree Centre, Science and Technology Facility Council (STFC), Daresbury, Warrington WA4 4AD, UK)

  • Alexandros Maziotis

    (Departamento de Ingeniería Hidráulica y Ambiental, Pontificia Universidad Católica de Chile, 4860 Santiago, Chile)

Abstract

Analyzing costs and greenhouse gas (GHG) emissions could be of great importance for the water utilities to supply water services in a healthy and sustainable manner. In this study, we measured the eco-efficiency of several water utilities in England and Wales by incorporating GHG as an undesirable output. For the first time, we evaluated the eco-efficiency of the water production process using robust cross-efficiency data envelopment analysis (DEA) techniques. The further use of clustering and regression techniques allowed us to better understand the drivers of eco-efficiency. The results showed that the mean eco-efficiency of the water sector was 0.748, which indicates that costs and GHG emissions could be reduced by 25.2% to generate the same level of output. Large water companies with high energy costs and levels of GHG emissions belonged to the less eco-efficient group. Environmental factors related to density, topography, and treatment complexity further impacted eco-efficiency. Finally, we linked our results to the regulatory cycle and discuss some policy implications.

Suggested Citation

  • Ramon Sala-Garrido & Manuel Mocholi-Arce & Maria Molinos-Senante & Michail Smyrnakis & Alexandros Maziotis, 2021. "Eco-Efficiency of the English and Welsh Water Companies: A Cross Performance Assessment," IJERPH, MDPI, vol. 18(6), pages 1-17, March.
    • Handle: RePEc:gam:jijerp:v:18:y:2021:i:6:p:2831-:d:514516
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/18/6/2831/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1660-4601/18/6/2831/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Wang, Ying-Ming & Chin, Kwai-Sang, 2010. "Some alternative models for DEA cross-efficiency evaluation," International Journal of Production Economics, Elsevier, vol. 128(1), pages 332-338, November.
    2. Byrnes, Joel & Crase, Lin & Dollery, Brian & Villano, Renato, 2010. "The relative economic efficiency of urban water utilities in regional New South Wales and Victoria," Resource and Energy Economics, Elsevier, vol. 32(3), pages 439-455, August.
    3. Li Xie & Chunlin Chen & Yihua Yu, 2019. "Dynamic Assessment of Environmental Efficiency in Chinese Industry: A Multiple DEA Model with a Gini Criterion Approach," Sustainability, MDPI, vol. 11(8), pages 1-22, April.
    4. Cui, Qiang & Li, Ye, 2020. "A cross efficiency distinguishing method to explore the cooperation degree in dynamic airline environmental efficiency," Transport Policy, Elsevier, vol. 99(C), pages 31-43.
    5. Ananda, Jayanath & Hampf, Benjamin, 2015. "Measuring environmentally sensitive productivity growth: An application to the urban water sector," Ecological Economics, Elsevier, vol. 116(C), pages 211-219.
    6. Zhou, P. & Ang, B.W., 2008. "Linear programming models for measuring economy-wide energy efficiency performance," Energy Policy, Elsevier, vol. 36(8), pages 2901-2906, August.
    7. E Thanassoulis, 2002. "Comparative performance measurement in regulation: the case of English and Welsh sewerage services," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 53(3), pages 292-302, March.
    8. Levent Kutlu, 2020. "Greenhouse Gas Emission Efficiencies of World Countries," IJERPH, MDPI, vol. 17(23), pages 1-11, November.
    9. Hampf, Benjamin & Ananda, Jayanath, 2015. "Measuring environmentally sensitive productivity growth: An application to the urban water sector," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 77008, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    10. María Molinos-Senante & Alexandros Maziotis, 2020. "Drivers of productivity change in water companies: an empirical approach for England and Wales," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 36(6), pages 972-991, November.
    11. Liu, Liwei & Sun, Xiaoru & Chen, Chuxiang & Zhao, Erdong, 2016. "How will auctioning impact on the carbon emission abatement cost of electric power generation sector in China?," Applied Energy, Elsevier, vol. 168(C), pages 594-609.
    12. Fare, Rolf & Grosskopf, Shawna, 2004. "Modeling undesirable factors in efficiency evaluation: Comment," European Journal of Operational Research, Elsevier, vol. 157(1), pages 242-245, August.
    13. David Saal & David Parker & Tom Weyman-Jones, 2007. "Determining the contribution of technical change, efficiency change and scale change to productivity growth in the privatized English and Welsh water and sewerage industry: 1985–2000," Journal of Productivity Analysis, Springer, vol. 28(1), pages 127-139, October.
    14. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    15. Molinos-Senante, María & Guzmán, Catalina, 2018. "Reducing CO2 emissions from drinking water treatment plants: A shadow price approach," Applied Energy, Elsevier, vol. 210(C), pages 623-631.
    16. Molinos-Senante, María & Hanley, Nick & Sala-Garrido, Ramón, 2015. "Measuring the CO2 shadow price for wastewater treatment: A directional distance function approach," Applied Energy, Elsevier, vol. 144(C), pages 241-249.
    17. María Molinos-Senante & Simon Porcher & Alexandros Maziotis, 2018. "Productivity change and its drivers for the Chilean water companies: A comparison of full private and concessionary companies," Post-Print hal-02145824, HAL.
    18. Molinos-Senante, María & Hernández-Sancho, Francesc & Mocholí-Arce, Manuel & Sala-Garrido, Ramón, 2014. "Economic and environmental performance of wastewater treatment plants: Potential reductions in greenhouse gases emissions," Resource and Energy Economics, Elsevier, vol. 38(C), pages 125-140.
    19. Chen, Pi-Cheng & Alvarado, Valeria & Hsu, Shu-Chien, 2018. "Water energy nexus in city and hinterlands: Multi-regional physical input-output analysis for Hong Kong and South China," Applied Energy, Elsevier, vol. 225(C), pages 986-997.
    20. Humberto Brea-Solis & Sergio Perelman & David Saal, 2017. "Regulatory incentives to water losses reduction: the case of England and Wales," Journal of Productivity Analysis, Springer, vol. 47(3), pages 259-276, June.
    21. Liao, Xiawei & Zhao, Xu & Liu, Wenfeng & Li, Ruoshui & Wang, Xiaoxi & Wang, Wenpeng & Tillotson, Martin R., 2020. "Comparing water footprint and water scarcity footprint of energy demand in China’s six megacities," Applied Energy, Elsevier, vol. 269(C).
    22. Junfeng Zhang & Hong Fang & Bo Peng & Xu Wang & Siran Fang, 2016. "Productivity Growth-Accounting for Undesirable Outputs and Its Influencing Factors: The Case of China," Sustainability, MDPI, vol. 8(11), pages 1-13, November.
    23. Liang, Liang & Wu, Jie & Cook, Wade D. & Zhu, Joe, 2008. "Alternative secondary goals in DEA cross-efficiency evaluation," International Journal of Production Economics, Elsevier, vol. 113(2), pages 1025-1030, June.
    24. Thanassoulis, Emmanuel, 2000. "The use of data envelopment analysis in the regulation of UK water utilities: Water distribution," European Journal of Operational Research, Elsevier, vol. 126(2), pages 436-453, October.
    25. Molinos-Senante, María & Porcher, Simon & Maziotis, Alexandros, 2017. "Impact of regulation on English and Welsh water-only companies: an input-distance function approach," LSE Research Online Documents on Economics 82972, London School of Economics and Political Science, LSE Library.
    26. Mukherjee, Kankana, 2010. "Measuring energy efficiency in the context of an emerging economy: The case of indian manufacturing," European Journal of Operational Research, Elsevier, vol. 201(3), pages 933-941, March.
    27. Molinos-Senante, María & Villegas, Andres & Maziotis, Alexandros, 2019. "Are water tariffs sufficient incentives to reduce water leakages? An empirical approach for Chile," Utilities Policy, Elsevier, vol. 61(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Claudiu George Bocean & Cristina Claudia Rotea & Anca Antoaneta Vărzaru & Andra-Nicoleta Ploscaru & Cătălin-Ștefan Rotea, 2021. "A Two-Stage SEM—Artificial Neural Network Analysis of the Rewards Effects on Self Perceived Performance in Healthcare," IJERPH, MDPI, vol. 18(23), pages 1-19, November.
    2. Manuel Mocholi-Arce & Ramon Sala-Garrido & Maria Molinos-Senante & Alexandros Maziotis, 2022. "Measuring the eco-efficiency of the provision of drinking water by two-stage network data envelopment analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(11), pages 12883-12899, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Manuel Mocholi-Arce & Ramon Sala-Garrido & Maria Molinos-Senante & Alexandros Maziotis, 2022. "Measuring the eco-efficiency of the provision of drinking water by two-stage network data envelopment analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(11), pages 12883-12899, November.
    2. Ramón Sala-Garrido & Manuel Mocholí-Arce & María Molinos-Senante & Alexandros Maziotis, 2021. "Comparing Operational, Environmental and Eco-Efficiency of Water Companies in England and Wales," Energies, MDPI, vol. 14(12), pages 1-14, June.
    3. Sala-Garrido, Ramon & Mocholi-Arce, Manuel & Molinos-Senante, Maria & Maziotis, Alexandros, 2021. "Assessing the marginal cost of reducing greenhouse gas emissions in the English and Welsh water and sewerage industry: A parametric approach," Utilities Policy, Elsevier, vol. 70(C).
    4. Sala-Garrido, Ramon & Mocholi-Arce, Manuel & Maziotis, Alexandros & Molinos-Senante, María, 2023. "The carbon and production performance of water utilities: Evidence from the English and Welsh water industry," Structural Change and Economic Dynamics, Elsevier, vol. 64(C), pages 292-300.
    5. Goh, Kim Huat & See, Kok Fong, 2021. "Measuring the productivity growth of Malaysia's water sector: Implications for regulatory reform," Utilities Policy, Elsevier, vol. 71(C).
    6. Maria Molinos-Senante & Alexandros Maziotis, 2021. "The Cost of Reducing Municipal Unsorted Solid Waste: Evidence from Municipalities in Chile," Sustainability, MDPI, vol. 13(12), pages 1-14, June.
    7. Tourinho, Marco & Santos, Paulo Rosa & Pinto, Francisco Taveira & Camanho, Ana S., 2022. "Performance assessment of water services in Brazilian municipalities: An integrated view of efficiency and access," Socio-Economic Planning Sciences, Elsevier, vol. 79(C).
    8. Sueyoshi, Toshiyuki & Yuan, Yan & Goto, Mika, 2017. "A literature study for DEA applied to energy and environment," Energy Economics, Elsevier, vol. 62(C), pages 104-124.
    9. Molinos-Senante, María & Villegas, Andres & Maziotis, Alexandros, 2019. "Are water tariffs sufficient incentives to reduce water leakages? An empirical approach for Chile," Utilities Policy, Elsevier, vol. 61(C).
    10. Romano, Giulia & Guerrini, Andrea, 2011. "Measuring and comparing the efficiency of water utility companies: A data envelopment analysis approach," Utilities Policy, Elsevier, vol. 19(3), pages 202-209.
    11. Alexandros Maziotis & María Molinos-Senante & Ramon Sala-Garrido, 2017. "Assesing the Impact of Quality of Service on the Productivity of Water Industry: a Malmquist-Luenberger Approach for England and Wales," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(8), pages 2407-2427, June.
    12. Molinos-Senante, María & Maziotis, Alexandros & Sala-Garrido, Ramón, 2020. "Changes in the total costs of the English and Welsh water and sewerage industry: The decomposed effect of price and quantity inputs on efficiency," Utilities Policy, Elsevier, vol. 66(C).
    13. Mardani, Abbas & Zavadskas, Edmundas Kazimieras & Streimikiene, Dalia & Jusoh, Ahmad & Khoshnoudi, Masoumeh, 2017. "A comprehensive review of data envelopment analysis (DEA) approach in energy efficiency," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 1298-1322.
    14. Maria Molinos-Senante & Alexandros Maziotis, 2021. "Productivity growth, economies of scale and scope in the water and sewerage industry: The Chilean case," PLOS ONE, Public Library of Science, vol. 16(5), pages 1-16, May.
    15. Azarnoosh Kafi & Behrouz Daneshian & Mohsen Rostamy-Malkhalifeh, 2021. "Forecasting the confidence interval of efficiency in fuzzy DEA," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 31(1), pages 41-59.
    16. Mocholi-Arce, Manuel & Sala-Garrido, Ramon & Molinos-Senante, Maria & Maziotis, Alexandros, 2023. "Profit productivity change in the English and Welsh water sector: Impact of the price reviews," Utilities Policy, Elsevier, vol. 82(C).
    17. Ruiz, José L. & Sirvent, Inmaculada, 2012. "On the DEA total weight flexibility and the aggregation in cross-efficiency evaluations," European Journal of Operational Research, Elsevier, vol. 223(3), pages 732-738.
    18. Mehdi Toloo & Mona Barat & Atefeh Masoumzadeh, 2015. "Selective measures in data envelopment analysis," Annals of Operations Research, Springer, vol. 226(1), pages 623-642, March.
    19. Michael Zschille & Matthias Walter, 2012. "The performance of German water utilities: a (semi)-parametric analysis," Applied Economics, Taylor & Francis Journals, vol. 44(29), pages 3749-3764, October.
    20. Picazo-Tadeo, Andrés J. & Sáez-Fernández, Francisco J. & González-Gómez, Francisco, 2008. "Assesing Performance in the Management of the Urban Water Cycle," Efficiency Series Papers 2008/01, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijerp:v:18:y:2021:i:6:p:2831-:d:514516. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.