engleski

Environmental Total-Factor Energy Efficiency in the EU countries

Governments of all countries are under pressure due to environmental issues like global warming and climate change. That is why one of the most important objectives for any energy policy is the improvement of total-factor energy efficiency. The purpose of this research is to evaluate the total- factor energy efficiency in EU countries and to examine the impact of undesirable outputs on these countries` energy efficiency. We used DEA (Data Envelopment Analysis) SBM Bad output model, incorporating multiple inputs and two kinds of multiple outputs: desirable and undesirable as the result of input utilization. Undesirable outputs are an anomaly, which should not be ignored when measuring total-factor energy efficiency. Namely, in case of emissions or pollution, regulatory standards define the maximum amount of undesirable outputs. The empirical results confirm that the DEA scores for total-factor energy efficiency incorporating undesirable outputs are more realistic then those obtained based only on desirable outputs as they do not calculate the negative impact on the environment. Results show significant differences in environmental total- factor efficiencies among developed and less developed EU countries. For every relatively inefficient country the projected values on efficient frontier are determined, as targets. These targets are useful in policy decision- making regarding environmental total- factor energy efficiency. Therefore, in order to solve their environmental problems, inefficient countries should aim to change their energy structure and consume behaviour. On the other hand, efficient countries whose governments have already directed their energy policy to environmental energy should serve as good practice examples.

Total-factor energy efficiency, EU countries, DEA, undesirable output

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