Achieving Net Zero—An Illustration of Carbon Emissions Reduction with A New Meta-Inverse DEA Approach

Author:

Yang Wen-Chi1ORCID,Lu Wen-Min2ORCID

Affiliation:

1. Department of Diplomacy, National Chengchi University, Taipei 11605, Taiwan

2. Department of International Business Administration, Chinese Culture University, Taipei 11114, Taiwan

Abstract

To achieve the goal of limiting global warming to 1.5 °C above preindustrial levels, net-zero emissions targets were proposed to assist countries in planning their long-term reduction. Inverse Data Envelopment Analysis (DEA) can be used to determine optimal input and output levels without sacrificing the set environmental efficiency target. However, treating countries as having the same capability to mitigate carbon emissions without considering their different developmental stages is not only unrealistic but also inappropriate. Therefore, this study incorporates a meta-concept into inverse DEA. This study adopts a three-stage approach. In the first stage, a meta-frontier DEA method is adopted to assess and compare the eco-efficiency of developed and developing countries. In the second stage, the specific super-efficiency method is adopted to rank the efficient countries specifically focused on carbon performance. In the third stage, carbon dioxide emissions reduction targets are proposed for the developed and developing countries separately. Then, a new meta-inverse DEA method is used to allocate the emissions reduction target to the inefficient countries in each of the specific groups. In this way, we can find the optimal CO2 reduction amount for the inefficient countries with unchanged eco-efficiency levels. The implications of the new meta-inverse DEA method proposed in this study are twofold. The method can identify how a DMU can reduce undesirable outputs without sacrificing the set eco-efficiency target, which is especially useful in achieving net-zero emissions since this method provides a roadmap for decision-makers to understand how to allocate the emissions reduction targets to different units. In addition, this method can be applied to heterogeneous groups where they are assigned to different emissions reduction targets.

Publisher

MDPI AG

Subject

Health, Toxicology and Mutagenesis,Public Health, Environmental and Occupational Health

Reference63 articles.

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