Total-factor Energy Efficiency And Energy Congestion:A Study Based On Production Theory

Energy efficiency analysis is of vital importance for researchers,analyst and policy makers due to its advantages in conducting energy efficiency performance,evaluating policy effectiveness and promoting public communication.Among many others,Data Envelopment Analysis(DEA)has been widely identified as a powerful tool for multi-input and multi-output energy efficiency evaluation as it can avoid using parametric/functional structure for the production technology.Nowadays,energy efficiency assessment with undesirable output has attracted much attention due to the increasing concern on environmental issues.However,some strong shortcomings associated with existing reference technologies and efficiency measures have been publicly expressed.Meanwhile,it is found that seldom energy efficiency studies take non-economic production process into consideration,which could lead to biased efficiency scores.This thesis contributes to the literature by conducting a systematic study on energy efficiency assessment with undesirable output and with non-economic production process,based on which some theory and methods about energy congestion are developed.The main contributions of this thesis are as follows:(1)Examine the formation mechanism and economical meaning of the joint production frontier.It is reasonable to measure efficiency by considering undesirable output,however,there is no concensus on the modeling of the production technology in the presence of undesirable output.This thesis employs the pollution generating and abatement theory to examine the true shape and properties of the joint production frontier,which solves some theoretical and methodological debates regarding weak disposability technology.This thesis also discusses the real meaning of input inefficieny and reveals why the traditional efficiency models relying on weak disposability reference technology give biased results.(2)Examine the economical meaning of weak disposability and propose modified efficiency measures.The conventional efficiency models show serious drawbacks,such as the non-monotonicity between efficiency and undesirable output,the undesirable output has meaningless shadow price and so on.The existing solutions to these problems cannot ensure the weak disposability of undesirable output and therefore may not refer to the true production technology.This thesis examines the economical meaning of weak disposability and propose modified efficiency measures which refer to the true production frontier and have meaningful dual economic interpretation.It is found that the modified models can solve the problems associated with conventional approaches and can provide reliable results.(3)Develop a modified total-factor energy efficiency(TFEE)index based on two kinds of weak disposability technology.It is found that the traditional energy efficiency models may lead to distorted and misleading energy efficiency scores due to violating monotonicity and failing to identify all the energy waste in production and abatement activities.This thesis develops a modified energy efficiency index which can ensure the energy efficiency score to be monotonic in undesirable outputs and ensure the shadow price of undesirable output in expected sign,as well as identifying all the energy waste.It is found that the modified energy efficiency index has more discriminatory power and more practical rationality.(4)Build a congested production technology and develop TFEE index and energy inefficiency decomposition models by considering both economic and non-economic production processes.The study on Chinese industry indicates that non-economic production process(congestion)is popular in industrial production,however,the traditional energy efficiency measures overestimate efficiency scores by neglecting such case.Based on the congested production technology,this thesis builds a TFEE index which can provide unbiased energy efficiency scores by considering non-economic production process.The energy inefficiency decomposition model can be used to examine energy waste caused by congestion.(5)Study on the phenomenon of energy congestion,examine the underlying determinant of energy congestion,build two energy congestion measures using DEA,and firstly conduct energy congestion analysis on Chinese industry.It is found that quality degradation of resources is the underlying determinant of energy congestion.Although energy congestion can be avoided at the firm level due to rational decision making,it can take place at the industry level.Both the input-oriented and output-oriented energy congestion measures indicate the industrial sectors in China exhibit energy congestion,especially in the western provinces.It is also found that energy congestion is more likely to be found in provinces with high energy intensity and poor development level.