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Energy Efficiency and Mitigation of Greenhouse Gas Emissions in Mexico's Manufacturing Sector

Author

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  • Anna D. Mata
  • Héctor M. Núñez

Abstract

This study examines the energy efficiency and environmental performance of Mexico's manufacturing sector across regions. We employ a Data Envelopment Analysis model that optimizes the weighted output-input ratio for each decision-making unit. Specifically, a non-radial directional distance function model is used to account for both desirable outputs and undesirable outputs, represented by greenhouse gas emissions. The findings show that including undesirable outputs reduces the estimated economic efficiency. Over the analysis period, the production frontier shifted only modestly. Regionally, northern states perform best, while southern states lag behind, revealing considerable potential for national energy and emission savings.

Suggested Citation

  • Anna D. Mata & Héctor M. Núñez, 2025. "Energy Efficiency and Mitigation of Greenhouse Gas Emissions in Mexico's Manufacturing Sector," Working Papers 2025-10, Banco de México.
    • Handle: RePEc:bdm:wpaper:2025-10
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    File URL: https://www.banxico.org.mx/publications-and-press/banco-de-mexico-working-papers/%7BF465355C-5D73-9479-AAA2-9E30BC6BDA9E%7D.pdf
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    More about this item

    Keywords

    Undesirable output; Energy efficiency improvements; GHG emission performance; Directional distance function;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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