Environmental assessment by DEA radial measurement: U.S. coal-fired power plants in ISO (Independent System Operator) and RTO (Regional Transmission Organization)
The economic concept of weak and strong disposability on undesirable outputs dominated the previous discussions on DEA (Data Envelopment Analysis) radial measurement for environmental assessment. This study reexamines the economic concept from the perspective of corporate strategies on how to adapt a regulation change on undesirable outputs. The economic concept of disposability, conventionally accepted by production economists, is replaced by natural and managerial disposability in this study. The natural disposability implies an environmental strategy that a firm attempts to decrease an input vector to reduce a vector of undesirable outputs. Given the decreased input vector, the firm attempts to increase a vector of desirable outputs as much as possible. This type of strategy indicates negative adaptation. Meanwhile, the managerial disposability indicates an opposite strategy by increasing the input vector. This disposability expresses an environmental strategy by which a firm considers a regulation change on undesirable outputs as a new business opportunity. A firm attempts to improve its unified (operational and environmental) performance by utilizing new technology and/or new management. The strategy indicates positive adaptation. Considering the two types of disposability, this study discusses how to measure unified efficiency under natural and managerial disposability by DEA radial models. To document the practicality of the proposed DEA environmental assessment, this study applies it to compare the performance of U.S. coal-fired power plants under ISOs/RTOs (Independent System Operators/Regional Transmission Organizations) with that of the other power plants not belonging to any organization. This study identifies two empirical findings. One of the two findings is that the latter coal-fired power plants outperform the former power plants belonging to ISOs/RTOs in terms of three efficiency measures. This result indicates that ISOs and RTOs do not provide an effective coordination for coal-fired power plants at the level that can be found in the other power plants. The other finding is that there is technological improvement in the operation of coal-fired power plants.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Korhonen, Pekka J. & Luptacik, Mikulas, 2004. "Eco-efficiency analysis of power plants: An extension of data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 154(2), pages 437-446, April.
- Zhou, P. & Ang, B.W., 2008. "Linear programming models for measuring economy-wide energy efficiency performance," Energy Policy, Elsevier, vol. 36(8), pages 2901-2906, August.
- Timo Kuosmanen, 2005. "Weak Disposability in Nonparametric Production Analysis with Undesirable Outputs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 1077-1082.
- Kumar, Surender, 2006. "Environmentally sensitive productivity growth: A global analysis using Malmquist-Luenberger index," Ecological Economics, Elsevier, vol. 56(2), pages 280-293, February.
- Zaim, Osman, 2004. "Measuring environmental performance of state manufacturing through changes in pollution intensities: a DEA framework," Ecological Economics, Elsevier, vol. 48(1), pages 37-47, January.
- Michael E. Porter & Claas van der Linde, 1995. "Toward a New Conception of the Environment-Competitiveness Relationship," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 97-118, Fall.
- Sueyoshi, Toshiyuki & Sekitani, Kazuyuki, 2009. "An occurrence of multiple projections in DEA-based measurement of technical efficiency: Theoretical comparison among DEA models from desirable properties," European Journal of Operational Research, Elsevier, vol. 196(2), pages 764-794, July.
- Karen Palmer & Wallace E. Oates & Paul R. Portney, 1995. "Tightening Environmental Standards: The Benefit-Cost or the No-Cost Paradigm?," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 119-132, Fall.
- Sueyoshi, Toshiyuki & Goto, Mika, 2011. "Methodological comparison between two unified (operational and environmental) efficiency measurements for environmental assessment," European Journal of Operational Research, Elsevier, vol. 210(3), pages 684-693, May.
- Sueyoshi, Toshiyuki & Goto, Mika & Ueno, Takahiro, 2010. "Performance analysis of US coal-fired power plants by measuring three DEA efficiencies," Energy Policy, Elsevier, vol. 38(4), pages 1675-1688, April.
- Sueyoshi, Toshiyuki, 2010. "An agent-based approach with collaboration among agents: Estimation of wholesale electricity price on PJM and artificial data generated by a mean reverting model," Energy Economics, Elsevier, vol. 32(5), pages 1025-1033, September.
- Podinovski, Victor V. & Kuosmanen, Timo, 2011. "Modelling weak disposability in data envelopment analysis under relaxed convexity assumptions," European Journal of Operational Research, Elsevier, vol. 211(3), pages 577-585, June.
- Sueyoshi, Toshiyuki & Goto, Mika, 2011. "Measurement of Returns to Scale and Damages to Scale for DEA-based operational and environmental assessment: How to manage desirable (good) and undesirable (bad) outputs?," European Journal of Operational Research, Elsevier, vol. 211(1), pages 76-89, May.
- Zhou, P. & Ang, B.W. & Poh, K.L., 2008. "A survey of data envelopment analysis in energy and environmental studies," European Journal of Operational Research, Elsevier, vol. 189(1), pages 1-18, August.
- Pasurka, Carl Jr., 2006. "Decomposing electric power plant emissions within a joint production framework," Energy Economics, Elsevier, vol. 28(1), pages 26-43, January.
- Sueyoshi, Toshiyuki & Goto, Mika, 2012. "Data envelopment analysis for environmental assessment: Comparison between public and private ownership in petroleum industry," European Journal of Operational Research, Elsevier, vol. 216(3), pages 668-678.
- Sueyoshi, Toshiyuki, 2010. "An agent-based approach equipped with game theory: Strategic collaboration among learning agents during a dynamic market change in the California electricity crisis," Energy Economics, Elsevier, vol. 32(5), pages 1009-1024, September.
- Sueyoshi, Toshiyuki & Goto, Mika, 2012. "Returns to scale and damages to scale under natural and managerial disposability: Strategy, efficiency and competitiveness of petroleum firms," Energy Economics, Elsevier, vol. 34(3), pages 645-662.
- Sueyoshi, Toshiyuki & Goto, Mika, 2010. "Should the US clean air act include CO2 emission control?: Examination by data envelopment analysis," Energy Policy, Elsevier, vol. 38(10), pages 5902-5911, October.
- Yang, Hongliang & Pollitt, Michael, 2010. "The necessity of distinguishing weak and strong disposability among undesirable outputs in DEA: Environmental performance of Chinese coal-fired power plants," Energy Policy, Elsevier, vol. 38(8), pages 4440-4444, August.
- Fare, Rolf, et al, 1989. "Multilateral Productivity Comparisons When Some Outputs Are Undesirable: A Nonparametric Approach," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 90-98, February.
- Sueyoshi, Toshiyuki & Goto, Mika, 2010. "Measurement of a linkage among environmental, operational, and financial performance in Japanese manufacturing firms: A use of Data Envelopment Analysis with strong complementary slackness condition," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1742-1753, December.
- Glover, Fred & Sueyoshi, Toshiyuki, 2009. "Contributions of Professor William W. Cooper in Operations Research and Management Science," European Journal of Operational Research, Elsevier, vol. 197(1), pages 1-16, August.
- Fare, R. & Grosskopf, S. & Pasurka, C., 1986. "Effects on relative efficiency in electric power generation due to environmental controls," Resources and Energy, Elsevier, vol. 8(2), pages 167-184, June.
- Zhou, P. & Ang, B.W. & Han, J.Y., 2010. "Total factor carbon emission performance: A Malmquist index analysis," Energy Economics, Elsevier, vol. 32(1), pages 194-201, January.
- Picazo-Tadeo, Andres J. & Reig-Martinez, Ernest & Hernandez-Sancho, Francesc, 2005. "Directional distance functions and environmental regulation," Resource and Energy Economics, Elsevier, vol. 27(2), pages 131-142, June.
- Sueyoshi, Toshiyuki & Goto, Mika, 2011. "DEA approach for unified efficiency measurement: Assessment of Japanese fossil fuel power generation," Energy Economics, Elsevier, vol. 33(2), pages 292-303, March.
- Triantis, Konstantinos & Otis, Paul, 2004. "Dominance-based measurement of productive and environmental performance for manufacturing," European Journal of Operational Research, Elsevier, vol. 154(2), pages 447-464, April.
- Emrouznejad, Ali & Parker, Barnett R. & Tavares, Gabriel, 2008. "Evaluation of research in efficiency and productivity: A survey and analysis of the first 30 years of scholarly literature in DEA," Socio-Economic Planning Sciences, Elsevier, vol. 42(3), pages 151-157, September.
When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:34:y:2012:i:3:p:663-676. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.