Carbon Emissions Abatement (CEA) allocation and compensation schemes based on DEA

Chenpeng Feng, Feng Chu, Jingjing Ding, Gongbing Bi and Liang Liang

Omega, 2015, vol. 53, issue C, 78-89

Abstract: As environment constraints on economic growth are strengthening, Carbon Emissions Abatement (CEA) allocation becomes a significant issue that draws academia׳s attention. In the literature, the Data Envelopment Analysis (DEA) technique has been applied to obtain CEA allocation with centralized models. Nevertheless, a centralized allocation plan suffers from an implementation difficulty in persuading decision-making units (DMUs) into an agreement. In this paper, we propose a new two-step method to mitigate this side effect. In the first step, we provide improved DEA-based centralized allocation models under the assumptions of constant returns-to-scale (CRS) and variable returns-to-scale (VRS) respectively and in the second step, two compensation schemes are developed for centralized allocation plans. An empirical application to the countries in Organization for Economic Co-operation and Development (OECD) is presented to elaborate the main idea.

Keywords: Carbon Emissions Abatement (CEA) allocation; Gross Domestic Product (GDP); Two-step method; Data Envelopment Analysis (DEA); Compensation scheme (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (48)

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DOI: 10.1016/j.omega.2014.12.005

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