Are Sustainable Development Policies Really Feasible? Focused on the Petrochemical Industry in Korea

Yongrok Choi, Hyoung Seok Lee and Ahmed Mastur
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Yongrok Choi: Department of International Trade, Inha University, Inharo100, Nam-gu, Incheon 402-751, Korea
Hyoung Seok Lee: East Asia Environment Research Center, Inha University, Inharo100, Nam-Gu, Incheon 402-751, Korea
Ahmed Mastur: Global e-governance Program, Inha University, Inharo 100, Nam-gu, Incheon 402-751, Korea

Sustainability, 2019, vol. 11, issue 14, 1-17

Abstract: Korea inaugurated an emission trading scheme (ETS) in 2015 for its ambitious target to reduce 37% greenhouse gas per 2030 business-as-usual level. This study examines the sustainable governance of the Korean petrochemical industry, one of the world’s major emitters of greenhouse gas, with 55 firms participating in ETS. On the basis of the non-radial, non-parametric directional distance function, this study derives three types of efficiencies: greenhouse gas technical efficiency (GTE), pure technical efficiency, and scale efficiency. Using these indices, this study also provides information for benchmarking for the fast followers. The findings of this study reveal the following. First, petrochemical industry exhibits 63.5% ETS performance, on average, showing huge potential improvement. Second, by decomposing GTE value, this study provides information from the perspective of scale to find out the oversupply issues in some petrochemical firms. Lastly, benchmark information for each firm is provided to enhance its efficiency.

Keywords: Paris agreement; Korean ETS; greenhouse gas; petrochemical industry; non-radial DDF-DEA (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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