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Environmental cost-benefit analysis of alternative timing strategies in greenhouse gas abatement: A data envelopment analysis approach

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  • Kuosmanen, Timo
  • Bijsterbosch, Neil
  • Dellink, Rob

Abstract

Assessing the benefits of climate policies is complicated due to ancillary benefits: abatement of greenhouse gases also reduces local air pollution. The timing of the abatement measures influences both the economic costs and ancillary benefits. This paper conducts efficiency analysis of ten alternative timing strategies, taking into account the ancillary benefits. We apply the approach by Kuosmanen and Kortelainen [Valuing Environmental Factors in Cost-Benefit Analysis Using Data Envelopment Analysis, Ecological Economics 62 (2007), 56-65], which does not require prior valuation of the environmental impacts. The assessment is based on synthetic data from a dynamic applied general equilibrium model calibrated to The Netherlands. Our assessment shows that if one is only interested in GHG abatement at the lowest economic cost, then equal reduction of GHGs over time is preferred. If society is willing to pay a premium for higher ancillary benefits, an early mid-intensive reduction strategy is optimal.

Suggested Citation

  • Kuosmanen, Timo & Bijsterbosch, Neil & Dellink, Rob, 2009. "Environmental cost-benefit analysis of alternative timing strategies in greenhouse gas abatement: A data envelopment analysis approach," Ecological Economics, Elsevier, vol. 68(6), pages 1633-1642, April.
    • Handle: RePEc:eee:ecolec:v:68:y:2009:i:6:p:1633-1642
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    7. Kuosmanen, Timo & Kuosmanen, Natalia, 2009. "How not to measure sustainable value (and how one might)," Ecological Economics, Elsevier, vol. 69(2), pages 235-243, December.
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    9. Onyimadu, Chukwuemeka, 2015. "Managing an Accumulative Inorganic Pollutant: An Optimal Tax Prescription for the Social Planner," MPRA Paper 77196, University Library of Munich, Germany.
    10. Moriah Bostian & Rolf Färe & Shawna Grosskopf & Tommy Lundgren & William L. Weber, 2018. "Time substitution for environmental performance: The case of Swedish manufacturing," Empirical Economics, Springer, vol. 54(1), pages 129-152, February.
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    12. Krook Riekkola, Anna & Ahlgren, Erik O. & Söderholm, Patrik, 2011. "Ancillary benefits of climate policy in a small open economy: The case of Sweden," Energy Policy, Elsevier, vol. 39(9), pages 4985-4998, September.
    13. Rolf Färe & Shawna Grosskopf & Dimitri Margaritis & William Weber, 2012. "Technological change and timing reductions in greenhouse gas emissions," Journal of Productivity Analysis, Springer, vol. 37(3), pages 205-216, June.
    14. Bostian, Moriah & Färe, Rolf & Grosskopf, Shawna & Lundgren, Tommy & Weber, William L., 2016. "Time substitution for environmental performance: The case of Sweden manufacturing," CERE Working Papers 2016:3, CERE - the Center for Environmental and Resource Economics.
    15. Mengxue Ji & Zhenming Wu & Dandan Zhu, 2023. "Environmental Vertical Management and Enterprises’ Performance: Evidence from Water Pollution Reduction in China," Sustainability, MDPI, vol. 15(19), pages 1-17, September.
    16. Gongli Luo & Xiaotong Wang & Lu Wang & Yanlu Guo, 2021. "The Relationship between Environmental Regulations and Green Economic Efficiency: A Study Based on the Provinces in China," IJERPH, MDPI, vol. 18(3), pages 1-17, January.
    17. Zifeng Liang & Manli Zhang & Qingduo Mao & Bingxin Yu & Ben Ma, 2018. "Improvement of Eco-Efficiency in China: A Comparison of Mandatory and Hybrid Environmental Policy Instruments," IJERPH, MDPI, vol. 15(7), pages 1-20, July.
    18. Lin, Boqiang & Yang, Lisha, 2014. "Efficiency effect of changing investment structure on China׳s power industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 403-411.
    19. Chen, Shiyi & Härdle, Wolfgang Karl, 2012. "Dynamic activity analysis model based win-win development forecasting under the environmental regulation in China," SFB 649 Discussion Papers 2012-002, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.

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