Measuring energy usage and sustainability development in Asian nations by DEA intermediate approach

This study proposes a new use of data envelopment analysis (DEA) for assessing economic success and environmental protection, so measuring the level of sustainability. The new approach is referred to as “DEA environmental assessment,” and it can measure the performance of various entities that use inputs to produce not only desirable outputs but also undesirable outputs. DEA models are generally classified into radial or non-radial category. This study proposes a new “intermediate” approach between them. As an illustrative application, this study is interested in empirical assessment on energy usage and social sustainability of 21 Asian nations from 2008 to 2014. The energy usage, usually classified into primal (e.g., oil and coal) and secondary (i.e., electricity) categories, is essential in developing the economy, but the development simultaneously produces various pollutions (e.g., carbon emission). They have been developing their economic prosperities in a short period, but simultaneously suffering from such pollutions. All Asian nations are classified into four or five groups based upon their unified efficiency measures under natural disposability, where economic performance is the first priority and environmental performance is the second, along with managerial disposability with the opposite priority to the natural disposability. An implication found in this study is that among Asian nations, Japan and New Zealand belong to the first tier in terms of developing their social sustainability. Japan’s economy started to turn down after 2012 and faced a pitfall in recent years. Meanwhile, New Zealand has developed its economy by exporting agriculture products and is surrounded by natural beauty. Thus, the two nations are ranked as the top tier under the four types of unified efficiency measures. Beside these expected findings, this study has found that large nations such as China and India have not badly performed if we consider the size of their economies. This is a surprising result because they are large carbon emitters in the world and thereby they have been often criticized by international communities. Their problem is that the living standard of people is low because of the size of population. The empirical findings are useful in developing the energy and industrial policies of Asian nations.