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Measuring and decomposing sustainable efficiency in agricultural production: A cumulative exergy balance approach

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  • Hoang, Viet-Ngu
  • Rao, D.S. Prasada

Abstract

Environmental efficiency measures constructed using the materials balance principle have two important shortcomings: (1) the ambiguity in the treatment of immaterial inputs and the various types of energy and (2) the lack of universally accepted weights for various material inputs. These two limitations are primarily caused by the fact that the materials balance condition is strictly regulated by the law of mass/energy conservation and that mass/energy content cannot be a good physical common unit of various inputs. The use of cumulative exergy content overcomes these problems. The use of cumulative exergy content allows the inclusion of life cycle assessment; hence facilitates the analysis of the cumulative pollution and total affects on natural resources. The present study uses cumulative exergy content to construct new efficiency sustainable measures and decomposes them into technical efficiency and cumulative exergy allocative efficiency in agricultural production. Empirical applications on OECD agriculture yielded a number of important findings: (1) OECD has the potential to save 72.3% of cumulative exergy consumption and improvements can be achieved by being more technically efficient and choosing a better combination of inputs; (2) the sustainable efficiency varied enormously across countries; and (3) the efficiency levels in 2003 was lower than in 1990.

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  • Hoang, Viet-Ngu & Rao, D.S. Prasada, 2010. "Measuring and decomposing sustainable efficiency in agricultural production: A cumulative exergy balance approach," Ecological Economics, Elsevier, vol. 69(9), pages 1765-1776, July.
  • Handle: RePEc:eee:ecolec:v:69:y:2010:i:9:p:1765-1776
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    2. Blancard, Stéphane & Martin, Elsa, 2014. "Energy efficiency measurement in agriculture with imprecise energy content information," Energy Policy, Elsevier, vol. 66(C), pages 198-208.
    3. Xiaoling Wang & Haiying Lin & Olaf Weber, 2016. "Does Adoption of Management Standards Deliver Efficiency Gain in Firms’ Pursuit of Sustainability Performance? An Empirical Investigation of Chinese Manufacturing Firms," Sustainability, MDPI, Open Access Journal, vol. 8(7), pages 1-18, July.
    4. Mercedes Beltrán-Esteve & José Gómez-Limón & Andrés Picazo-Tadeo & Ernest Reig-Martínez, 2014. "A metafrontier directional distance function approach to assessing eco-efficiency," Journal of Productivity Analysis, Springer, vol. 41(1), pages 69-83, February.
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    6. Jeanneaux, Philippe & Latruffe, Laure, 2016. "Modelling pollution-generating technologies in performance benchmarking: Recent developments, limits and future prospects in the nonparametric frameworkAuthor-Name: Dakpo, K. Hervé," European Journal of Operational Research, Elsevier, vol. 250(2), pages 347-359.
    7. TurÄ eková, Natália & Svetlanská, T. & Kollár, B. & Záhorský, T., 2015. "Agri-Environmental Performance of EU Member states," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 7(4), December.
    8. Mardani, Abbas & Zavadskas, Edmundas Kazimieras & Streimikiene, Dalia & Jusoh, Ahmad & Khoshnoudi, Masoumeh, 2017. "A comprehensive review of data envelopment analysis (DEA) approach in energy efficiency," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 1298-1322.
    9. Ke Wang & Zhifu Mi & Yi-Ming Wei, 2018. "Will pollution taxes improve joint ecological and economic efficiency of thermal power industry in China? A DEA based materials balance approach," CEEP-BIT Working Papers 114, Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology.
    10. Vlontzos, George & Niavis, Spyros & Manos, Basil, 2014. "A DEA approach for estimating the agricultural energy and environmental efficiency of EU countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 40(C), pages 91-96.
    11. Picazo-Tadeo, Andrés J. & Beltrán-Esteve, Mercedes & Gómez-Limón, José A., 2012. "Assessing eco-efficiency with directional distance functions," European Journal of Operational Research, Elsevier, vol. 220(3), pages 798-809.
    12. Mohamed Ghali & Laure Latruffe & Karine Daniel, 2016. "Efficient Use of Energy Resources on French Farms: An Analysis through Technical Efficiency," Energies, MDPI, Open Access Journal, vol. 9(8), pages 1-15, July.
    13. Aldanondo, Ana M. & Casasnovas, Valero L. & Almansa, M. Carmen, 2016. "Cost-constrained measures of environmental efficiency: a material balance approach," MPRA Paper 72490, University Library of Munich, Germany.
    14. Blancard, Stephane & Martin, Elsa, 2012. "The measurement of energy performance," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 135123, Agricultural Economics Society.
    15. repec:eee:ecomod:v:222:y:2011:i:1:p:164-175 is not listed on IDEAS
    16. Ke Wang & Yi-Ming Wei & Zhimin Huang, 2017. "Environmental efficiency and abatement efficiency measurements of China¡¯s thermal power industry: A data envelopment analysis based materials balance approach," CEEP-BIT Working Papers 108, Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology.
    17. Viet-Ngu Hoang & Mohammad Alauddin, 2012. "Input-Orientated Data Envelopment Analysis Framework for Measuring and Decomposing Economic, Environmental and Ecological Efficiency: An Application to OECD Agriculture," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(3), pages 431-452, March.
    18. Hampf, Benjamin, 2015. "Estimating the materials balance condition: A stochastic frontier approach," Darmstadt Discussion Papers in Economics 226, Darmstadt University of Technology, Department of Law and Economics.
    19. Annageldy Arazmuradov, 2016. "Economic prospect on carbon emissions in Commonwealth of Independent States," Economic Change and Restructuring, Springer, vol. 49(4), pages 395-427, November.
    20. José A. Gómez-Limón & Andrés J. Picazo-Tadeo & Ernest Reig-Martínez, 2011. "Eco-efficiency Assessment of Olive Farms in Andalusia," Working Papers 1105, Department of Applied Economics II, Universidad de Valencia.
    21. K Hervé Dakpo & Philippe Jeanneaux & Laure Latruffe, 2014. "Inclusion of undesirable outputs in production technology modeling:The case of greenhouse gas emissions in French meat sheep farming," Working Papers SMART - LERECO 14-08, INRA UMR SMART-LERECO.
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