Abstract
The swift economic growth experienced by nations has exacerbated the challenge of global warming over the years. Cap-and-trade stands out as the most effective approach for managing and reducing greenhouse gas emissions. This study aims to construct a data envelopment analysis model to redistribute authorized emissions among decision-making units (DMUs). Notably, the model accounts for the intricate relationship between the production of desirable and undesirable outputs within the cap-and-trade framework. Furthermore, the model adapts the current mathematical modelling by addressing undesirable output as an inherent by-product of the desirable output. Emphasis is placed on maximizing the collective efficiency scores of all DMUs. Additionally, to confront the presence of multiple potential optimal solutions in the cap-and-trade context, the model computes the efficiency interval of DMUs. Finally, the paper showcases the model's capabilities by presenting a comprehensive case study, demonstrating its practical application and effectiveness in addressing emissions reallocation within the cap-and-trade system.
Original language | English |
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Journal | Annals of Operations Research |
Early online date | 28 Feb 2024 |
DOIs | |
Publication status | E-pub ahead of print - 28 Feb 2024 |
Bibliographical note
Copyright © 2024, The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature. This version of the article has been accepted for publication, after peer review and is subject to Springer Nature’s AM terms of use [https://www.springernature.com/gp/open-research/policies/accepted-manuscript-terms], but is not the Version of Record and does not reflect post-acceptance improvements, or any corrections. The Version of Record is available online at: https://doi.org/10.1007/s10479-024-05877-xKeywords
- Cap-and-trade
- Data envelopment analysis (DEA)
- Efficiency
- Reallocation
- Undesirable outputs