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Measuring and decomposing sustainable efficiency in agricultural production: A cumulative exergy balance approach

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  • Hoang, Viet-Ngu
  • Rao, D.S. Prasada

Abstract

Environmental efficiency measures constructed using the materials balance principle have two important shortcomings: (1) the ambiguity in the treatment of immaterial inputs and the various types of energy and (2) the lack of universally accepted weights for various material inputs. These two limitations are primarily caused by the fact that the materials balance condition is strictly regulated by the law of mass/energy conservation and that mass/energy content cannot be a good physical common unit of various inputs. The use of cumulative exergy content overcomes these problems. The use of cumulative exergy content allows the inclusion of life cycle assessment; hence facilitates the analysis of the cumulative pollution and total affects on natural resources. The present study uses cumulative exergy content to construct new efficiency sustainable measures and decomposes them into technical efficiency and cumulative exergy allocative efficiency in agricultural production. Empirical applications on OECD agriculture yielded a number of important findings: (1) OECD has the potential to save 72.3% of cumulative exergy consumption and improvements can be achieved by being more technically efficient and choosing a better combination of inputs; (2) the sustainable efficiency varied enormously across countries; and (3) the efficiency levels in 2003 was lower than in 1990.

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Bibliographic Info

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 69 (2010)
Issue (Month): 9 (July)
Pages: 1765-1776

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Handle: RePEc:eee:ecolec:v:69:y:2010:i:9:p:1765-1776

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Web page: http://www.elsevier.com/locate/ecolecon

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Keywords: Cumulative exergy analysis Eco-environmental performance Environmental efficiency OECD agriculture Sustainable agriculture Sustainable efficiency Technical efficiency;

References

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Cited by:
  1. Stéphane Blancard & Elsa Martin, 2012. "Energy efficiency measurement in agriculture with imprecise energy content information," INRA UMR CESAER Working Papers 2012/6, INRA UMR CESAER, Centre d'’Economie et Sociologie appliquées à l'’Agriculture et aux Espaces Ruraux.
  2. Viet-Ngu Hoang & Mohammad Alauddin, 2012. "Input-Orientated Data Envelopment Analysis Framework for Measuring and Decomposing Economic, Environmental and Ecological Efficiency: An Application to OECD Agriculture," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 51(3), pages 431-452, March.
  3. Blancard, Stephane & Martin, Elsa, 2012. "The measurement of energy performance," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 135123, Agricultural Economics Society.
  4. Andrés J. Picazo-Tadeo & Mercedes Beltrán-Esteve & José A. Gómez-Limón, 2011. "Assessing eco-efficiency with directional distance functions," Working Papers 1110, Department of Applied Economics II, Universidad de Valencia.
  5. José A. Gómez-Limón & Andrés J. Picazo-Tadeo & Ernest Reig-Martínez, 2011. "Eco-efficiency Assessment of Olive Farms in Andalusia," Working Papers 1105, Department of Applied Economics II, Universidad de Valencia.

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