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Measuring environmental efficiency of thermoelectric power plants: a common equilibrium efficient frontier DEA approach with fixed-sum undesirable output

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Abstract

China’s rapid development in economy has intensified many problems. One of the most important issues is the problem of environmental pollution. In this paper, a new DEA approach is proposed to measure the environmental efficiency of thermoelectric power plants, considering undesirable outputs. First, we assume that the total amount of undesirable outputs of any particular type is limited and fixed to current levels. In contrast to previous studies, this study requires fixed-sum undesirable outputs. In addition, the common equilibrium efficient frontier is constructed by using different input/output multipliers (or weights) for each different decision making unit (DMU), while previous approaches which considered fixed-sum outputs assumed a common input/output multiplier for all DMUs. The proposed method is applied to measure the environmental efficiencies of 30 thermoelectric power plants in mainland China. Our empirical study shows that half of the plants perform well in terms of environmental efficiency.

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Acknowledgements

This research is supported by National Natural Science Foundation of China (No. 71571173), Top-Notch Young Talents Program of China. Qingyuan Zhu thanks the support of the State Scholarship Fund by the Office of China Scholarship Council (No. 201606340054). Panpan Xia was also partially supported by China Postdoctoral Science Foundation (Nos. 2017M622027, 2018T110630) and the Fundamental Research Funds for the Central Universities (No. WK2040160029).

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Authors and Affiliations

  1. School of Management, University of Science and Technology of China, Hefei, 230026, Anhui Province, People’s Republic of China

    Jie Wu, Panpan Xia, Qingyuan Zhu & Junfei Chu

  2. Department of Business Administration, University of Illinois at Urbana-Champaign, Champaign, IL, 61822, USA

    Qingyuan Zhu

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  1. Jie Wu
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  2. Panpan Xia
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  3. Qingyuan Zhu
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  4. Junfei Chu
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Correspondence to Qingyuan Zhu.

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Wu, J., Xia, P., Zhu, Q. et al. Measuring environmental efficiency of thermoelectric power plants: a common equilibrium efficient frontier DEA approach with fixed-sum undesirable output. Ann Oper Res 275, 731–749 (2019). https://doi.org/10.1007/s10479-018-2958-0

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