ENERGY PRODUCTIVITY AND GREENHOUSE GAS EMISSION INTENSITY IN DUTCH DAIRY FARMS: A HICKS-MOORSTEEN BY-PRODUCTION APPROACH UNDER NONCONVEXITY

Frederic Ang () and Kristiaan Kerstens
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Frederic Ang: Business Economics Group, Wageningen University, P.O. Box 8130, 6700 EW Wageningen, The Netherlands

No 2021-EQM-07, Working Papers from IESEG School of Management

Abstract: The agricultural sector is currently confronted with the challenge to reduce greenhouse gas (GHG) emissions, whilst maintaining or increasing production. Energy-saving technologies are often proposed as a partial solution, but the evidence on their ability to reduce GHG emissions remains mixed. Production economics provides methodological tools to analyse the nexus of agricultural production, energy use and GHG emissions. Convexity is predominantly maintained in agricultural production economics, despite various theoretical and empirical reasons to question it. Employing a nonconvex, free disposal hull framework, this paper evaluates energy productivity change (the ratio of aggregate output change to energy use change) and GHG emission intensity change (the ratio of GHG emission change to polluting input change) using Hicks-Moorsteen productivity formulations. We consider GHG emissions as by-products of the production process by means of multi-equation modelling. The application focuses on 1,510 Dutch dairy farms for the period of 2010-2019. The results show a positive association between energy productivity change and GHG emission intensity change, which calls into question the potential of on-farm, energy-efficiency-increasing measures to reduce GHG emission intensity.

Keywords: energy; greenhouse gas emissions; productivity; dairy; nonconvexity (search for similar items in EconPapers)
JEL-codes: D22 D24 Q12 Q53 Q54 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2021-10
New Economics Papers: this item is included in nep-ure
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