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Carbon Emissions Abatement (CEA) allocation and compensation schemes based on DEA

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  • Feng, Chenpeng
  • Chu, Feng
  • Ding, Jingjing
  • Bi, Gongbing
  • Liang, Liang

Abstract

As environment constraints on economic growth are strengthening, Carbon Emissions Abatement (CEA) allocation becomes a significant issue that draws academia׳s attention. In the literature, the Data Envelopment Analysis (DEA) technique has been applied to obtain CEA allocation with centralized models. Nevertheless, a centralized allocation plan suffers from an implementation difficulty in persuading decision-making units (DMUs) into an agreement. In this paper, we propose a new two-step method to mitigate this side effect. In the first step, we provide improved DEA-based centralized allocation models under the assumptions of constant returns-to-scale (CRS) and variable returns-to-scale (VRS) respectively and in the second step, two compensation schemes are developed for centralized allocation plans. An empirical application to the countries in Organization for Economic Co-operation and Development (OECD) is presented to elaborate the main idea.

Suggested Citation

  • Feng, Chenpeng & Chu, Feng & Ding, Jingjing & Bi, Gongbing & Liang, Liang, 2015. "Carbon Emissions Abatement (CEA) allocation and compensation schemes based on DEA," Omega, Elsevier, vol. 53(C), pages 78-89.
    • Handle: RePEc:eee:jomega:v:53:y:2015:i:c:p:78-89
    DOI: 10.1016/j.omega.2014.12.005
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