Greenhouse Gas Emission Reduction Potentials in Europe by Sector: A Bootstrap-Based Nonparametric Efficiency Analysis

Jens J. Krüger and Moritz Tarach

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

Abstract: The reduction of greenhouse gas emissions is the key action to limit global warming. An important source of greenhouse gas emissions and pollution is the inefficiency of production processes. We report results from a stochastic nonparametric efficiency analysis using directional distance functions to take account of undesirable outputs like greenhouse gases. With this approach, we are able to provide estimates of the potential emission reductions for 7 main sectors in 16 European countries. A specially adapted bootstrapping approach allows to implement a bias correction of the estimates and to compute confidence intervals. The results show that static efficiency improvements are a quantitatively important element of the emission reductions which are required to achieve the reduction targets of the European Union.

Date: 2025-08-19
New Economics Papers: this item is included in nep-ene
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Published in Environmental and Resource Economics 4 (2025-08-19) : pp. 867-898

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https://tuprints.ulb.tu-darmstadt.de/28512
https://doi.org/10.1007/s10640-022-00660-7

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Persistent link: https://EconPapers.repec.org/RePEc:dar:wpaper:156572

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