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Greenhouse Gas Emissions and the Productivity Growth of Electricity Generators

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  • Murtough, Greg
  • Appels, David
  • Matysek, Anna
  • Lovell, C.A. Knox

Abstract

"Greenhouse Gas Emissions and the Productivity Growth of Electricity Generators" by Greg Murtough, David Appels, Anna Matysek, and C. A. Knox Lovell, was released on 18 December 2001. This paper develops and applies a measure of productivity growth that can incorporate unpriced environmental impacts. The methodology builds on the established technique of data envelopment analysis and is applied to one of the more significant environmental issues facing Australia - greenhouse gas emissions from electricity generation. The main finding of the paper is: productivity growth estimates for electricity generators can change significantly when allowance is made for greenhouse gas emissions. The paper develops an innovative statistical technique for incorporating environmental impacts in productivity estimates. It shows that accounting for greenhouse gas emissions reduces estimated productivity growth when emission intensity is rising and increases it when emission intensity is falling. In the late 1990s, changes in emission intensity (and hence the impact of emissions on estimated productivity growth) appear to have been largely driven by movements in thermal efficiency (electricity supplied per unit of fuel). The paper also found that there are regional differences in the cost (in terms of foregone output of electricity) of abating emissions. The views expressed in this paper are those of the staff involved and do not necessarily reflect those of the Productivity Commission.

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File URL: http://purl.umn.edu/31917
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Bibliographic Info

Paper provided by Productivity Commission in its series Staff Research Papers with number 31917.

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Date of creation: 2001
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Handle: RePEc:ags:prodsr:31917

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Keywords: Environmental Economics and Policy;

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  1. Gian Carlo Scarsi, 1999. "Local Electricity Distribution in Italy: Comparative Efficiency Analysis and Methodological Cross-Checking," Working Papers 1999.16, Fondazione Eni Enrico Mattei.
  2. Yaisawarng, Suthathip & Klein, J Douglass, 1994. "The Effects of Sulfur Dioxide Controls on Productivity Change in the U.S. Electric Power Industry," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 447-60, August.
  3. Reig-Martinez, Ernest & Picazo-Tadeo, Andres & Hernandez-Sancho, Francesc, 2001. "The calculation of shadow prices for industrial wastes using distance functions: An analysis for Spanish ceramic pavements firms," International Journal of Production Economics, Elsevier, vol. 69(3), pages 277-285, February.
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