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Greenhouse Gas Emission Reduction Potentials in Europe by Sector: A Bootstrap-Based Nonparametric Efficiency Analysis

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  • Jens J. Krüger

    (Technical University of Darmstadt)

  • Moritz Tarach

    (Technical University of Darmstadt)

Abstract

The reduction of greenhouse gas emissions is the key action to limit global warming. An important source of greenhouse gas emissions and pollution is the inefficiency of production processes. We report results from a stochastic nonparametric efficiency analysis using directional distance functions to take account of undesirable outputs like greenhouse gases. With this approach, we are able to provide estimates of the potential emission reductions for 7 main sectors in 16 European countries. A specially adapted bootstrapping approach allows to implement a bias correction of the estimates and to compute confidence intervals. The results show that static efficiency improvements are a quantitatively important element of the emission reductions which are required to achieve the reduction targets of the European Union.

Suggested Citation

  • Jens J. Krüger & Moritz Tarach, 2022. "Greenhouse Gas Emission Reduction Potentials in Europe by Sector: A Bootstrap-Based Nonparametric Efficiency Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(4), pages 867-898, April.
    • Handle: RePEc:kap:enreec:v:81:y:2022:i:4:d:10.1007_s10640-022-00660-7
    DOI: 10.1007/s10640-022-00660-7
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    2. Scarlett Wang & Frederic Ang & Alfons Oude Lansink, 2023. "Mitigating greenhouse gas emissions on Dutch dairy farms. An efficiency analysis incorporating the circularity principle," Agricultural Economics, International Association of Agricultural Economists, vol. 54(6), pages 819-837, November.

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    More about this item

    Keywords

    Climate policy; Environmental efficiency; Nonparametric measurement; bootstrapping; Europe;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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