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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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    References listed on IDEAS

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    Cited by:

    1. Shiyi Chen & Wolfgang Härdle, 2014. "Dynamic activity analysis model-based win-win development forecasting under environment regulations in China," Computational Statistics, Springer, vol. 29(6), pages 1543-1570, December.
    2. Anderson, Blake & M'Gonigle, Michael, 2012. "Does ecological economics have a future?," Ecological Economics, Elsevier, vol. 84(C), pages 37-48.
    3. Fujii, Hidemichi & Managi, Shunsuke, 2013. "Which industry is greener? An empirical study of nine industries in OECD countries," Energy Policy, Elsevier, vol. 57(C), pages 381-388.
    4. Chen, Shiyi, 2013. "What is the potential impact of a taxation system reform on carbon abatement and industrial growth in China?," Economic Systems, Elsevier, vol. 37(3), pages 369-386.
    5. Sueyoshi, Toshiyuki & Yuan, Yan & Goto, Mika, 2017. "A literature study for DEA applied to energy and environment," Energy Economics, Elsevier, vol. 62(C), pages 104-124.
    6. 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.
    7. Onyimadu, Chukwuemeka, 2015. "Managing an Accumulative Inorganic Pollutant: An Optimal Tax Prescription for the Social Planner," MPRA Paper 77196, University Library of Munich, Germany.
    8. Shiyi Chen & Wolfgang Karl Härdle, 2012. "Dynamic Activity Analysis Model Based Win-Win Development Forecasting Under the Environmental Regulation in China," SFB 649 Discussion Papers SFB649DP2012-002, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    9. 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.
    10. 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.
    11. 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.
    12. 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.

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