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Optimal Directions for Directional Distance Functions: An Exploration of Potential Reductions of Greenhouse Gases

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  • Hampf, Benjamin
  • Krüger, Jens

Abstract

This study explores the reduction potential of greenhouse gases for major pollution emitting countries of the world using nonparametric productivity measurement methods and directional distance functions. In contrast to the existing literature we apply optimization methods to endogenously determine optimal directions for the efficiency analysis. These directions represent the compromise of output enhancement and emissions reduction. The results show that for reasonable directions the adoption of best-practices would lead to sizable emission reductions in a range of about 20 percent compared to current levels.

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  • Hampf, Benjamin & Krüger, Jens, 2013. "Optimal Directions for Directional Distance Functions: An Exploration of Potential Reductions of Greenhouse Gases," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 77406, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:77406
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/77406/
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