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Optimal Directions for Directional Distance Functions: An Exploration of Potential Reductions of Greenhouse Gases
Author(s) -
Hampf Benjamin,
Krüger Jens J.
Publication year - 2015
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aau035
Subject(s) - greenhouse gas , reduction (mathematics) , productivity , range (aeronautics) , compromise , environmental science , greenhouse , nonparametric statistics , natural resource economics , environmental economics , economics , econometrics , mathematics , engineering , geology , agronomy , oceanography , biology , social science , geometry , aerospace engineering , sociology , macroeconomics
This article explores the reduction potential of greenhouse gases for major pollution‐emitting countries of the world using nonparametric productivity measurement methods and directional distance functions. In contrast to the existing literature, we apply optimization methods to endogenously determine optimal directions for the efficiency analysis. These directions represent the compromise of output enhancement and emissions reduction. The results show that for reasonable directions the adoption of best practices would lead to sizable emission reductions in a range of approximately 20% compared with current levels.