Environmental Efficiency Among Corn Ethanol Plants
Economic viability of the US corn ethanol industry depends on prices, technical and economic efficiency of plants and on continuation of policy support. Public policy support is tied to the environmental efficiency of plants measured as their impact on emissions of greenhouse gases. This study evaluates the environmental efficiency of seven recently constructed ethanol plants in the North Central region of the U.S., using nonparametric data envelopment analysis (DEA). The minimum level of GHG emissions feasible with the available technology is calculated for each plant and this level is used to decompose environmental efficiency into its technical and allocative sources. Results show that, on average, plants in our sample may be able to reduce GHG emissions by a maximum of 6% or by 3,116 tons per quarter. Profit maximizing input and output allocations are also found based on observed prices. The environmentally efficient allocation, the profit maximizing allocation, and the observed allocation for each plant are combined to calculate shadow cost of reducing greenhouse gas emissions. These shadow costs gauge the extent to which there is a trade off or a complementarity between environmental targets and profits. Results reveal that, at current activity levels, plants may have room for simultaneous improvement of environmental efficiency and economic profitability.
|Date of creation:||2010|
|Date of revision:|
|Contact details of provider:|| Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202|
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
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.:
- Tim Coelli & Ludwig Lauwers & Guido Huylenbroeck, 2007. "Environmental efficiency measurement and the materials balance condition," Journal of Productivity Analysis, Springer, vol. 28(1), pages 3-12, October.
- Perrin, Richard K. & Fretes, Nickolas F. & Sesmero, Juan Pablo, 2009. "Efficiency in Midwest US corn ethanol plants: A plant survey," Energy Policy, Elsevier, vol. 37(4), pages 1309-1316, April.
When requesting a correction, please mention this item's handle: RePEc:ags:aaea10:61650. 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: (AgEcon Search)
If references are entirely missing, you can add them using this form.