In summary, this paper employs a total-factor framework to analyze the environmental-energy efficiency of APEC economies. The IRT can be obtained by comparing the ideal input amount based on the ‘best practice’ of the production function and actual input. IRTR as a total-factor input-reducing efficiency indicator is constructed based on the theory of the frontier theory through DEA, which considers multiple input/output simultaneously. IRTR advises energy efficiency and IRT without scarifying real economic output for every economy. When input is the single input to produce GDP output, there might be an over-estimation or under-estimation of efficiency. The IRT and IRTR constructed in this paper are better ways to compute the input usage efficiency and also the input-reducing level.
In terms of environmental-energy policy, energy efficiency and CO2 abatement are the main issues. In this study a set of environmental-energy efficiency indicators was constructed for macroeconomic level, highlighting the main drivers behind energy consumption and CO2 emissions trends. The general methodology is a DEA analysis of monetary-based indicators in an economy level. Form the results of DEA approach, we calculate the efficiency indicators of energy saving and CO2 abatement for APEC economies. The potential of energy saving and CO2 abatement among APEC economies also are gained from the efficiency indicators. Those results provide an international comparative base for APEC member economies and a clear and identified policy direction for the policy-makers to create their environmental-energy policies according the position of their economies.
From analyzing their environment-energy efficiency in the period from 1991 to 2000, APEC economies have improved their efficiency. In particular, APEC’s developed members have performed better than their developing counterparts. Hong Kong, the Philippines, and the United States are the best performers among APEC economies. Taiwan caught up in the later 1990s. In contrast, China has the worst
environmental-energy efficiency with the highest percentage of total energy savings and CO2 abatement among APEC economies. It can save half of its current energy consumption and reduce 50 percent of its CO2 emissions while keeping the same output level. Furthermore, the environmental-energy efficiencies of the Southeast Asian economies are lower than average.
An inverted U-shape relation is found between per capita EST and per capita real income among APEC economies. Similarly to per capita EST, per capita CAT shows the EKC – an inverted U-shape relation with per capita real income level. The developed economies own a better per capita income, and so the target of environmental-energy savings is a minimum concern. The same thing does not happen to developing economies since these economies consume more energy and emit more CO2, but at a lower efficiency. According to these findings, the condition of environmental-energy efficiency and potential savings in the Southeast Asian economies should be paid more attention. Developing economies can both pursue their urgent requirements for increased energy services and reduce their environmentally damaging emissions. They cannot exploit resources with ‘no regrets’ on the one hand, while wanting to reduce energy inputs and emissions in order to achieve a given outcome on the other hand. Developing economies provide more opportunities for energy savings than developed economies, offering significant scope for technology transfer and international trade in consumer products.
Sharing and transferring the knowledge, technology, and know-how from an efficient economy to an inefficient economy is costly in reality. However, those APEC economies with higher environmental-energy efficiency should help the less-efficient economies to improve their environmental-energy efficiency based on their kindness, regional cooperation, and international responsibility by promoting energy conservation and CO2 abatement and the application of environmental-energy efficiency practices and technologies through advancing the application of demonstrated environmental-energy efficiency practices and technologies, developing and enhancing trade between
APEC economies in products and services, contributing to international efforts to reduce the adverse impacts of energy production and consumption, and improving the analytical, technical, operational and policy capacity for environmental-energy efficiency and conservation within APEC economies. The energy efficiency programs currently implemented in environmental-energy efficient APEC economies could provide an example for other economies in designing national policies. Based the data of 2000, the total energy-saving target of all APEC economies is 418.15Mtoe, taking 13.22% of their total energy consumption. The energy-saving amount will help APEC economies reduce pollution emissions and meet the principles of Kyoto Protocol.
Developing and newly-industrializing economies need not input more resources to maintain their economic growth, but can also save more energy and abate more emissions for sustainable development. Environmental-energy efficiency can be promoted without reducing maximum potential GDPs by importing new technology, improving processes, and changing the industrial structure to reduce wasteful energy use. For example, environmental-energy efficiency can be improved by shifting from energy-intensive industries (such as mining, basic metals, chemicals, and petrochemicals) to less energy-intensive manufacturing and/or service industries, even without more effective energy end-use technologies being implemented.
Even for the same sector, environmental-energy efficiency levels can be different across economies. Older power plants in many developing economies consume from 18% to 44% more fuels per kilowatt-hour of electricity produced than those in industrialized economies (Balce et al., 2001; Pearson and Fouquet, 1996). It is an interesting topic for future research to study how industry-level energy efficiency affects macro-level energy efficiency. However, this type of work needs detailed data for several industries across many economies.
Government agencies, non-profit organizations and the energy sector have to use a variety of instruments and programs to reduce energy consumption, to improve energy efficiency and to mitigate carbon emissions. The goal of environmental-energy
efficiency policy is to minimize market barriers and encourage the adoption of energy efficient products and services. Market barriers can include a lack of information about energy efficient products, risk aversion to trying new products and high initial purchase prices. In developing a policy strategy for encouraging energy efficiency, it is beneficial for economies to examine the experiences of other APEC members (APERC, 2001). Through the results of this study, inefficient economies considering policy actions are able to learn valuable lessons from the policy experiences of efficient APEC economies. Greater cooperation within the APEC region may reduce the cost and improve the success rate of new policies.
A range of sound policy principles and practices are identified. It is recognized that not all are appropriate for all APEC economies, but they provide options from which member economies can select, based on their particular circumstances. These practices include environmental impact assessment, environmental and performance standards, market based instruments, monitoring and enforcement, financial and taxation policies, and informative programs. Industrial structure, energy policies, energy consumption type, and treatments from an economic base can be further included. The efficiency frontier shift is another interesting topic to study, which can be conducted by DEA-Malmquist models. As long as the balance between economic growth, energy consumption and CO2 emissions is reached, sustainable development for APEC economies can be achieved.
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Appendix
Factors and units for calculating CO2 emissions from fuel production CO2i = (Pi) (FOi) (Ci)
From primary and secondary gas fuel production and trade1 CO2g = CO2 emissions in 106 metric tons of carbon
P g = annual production or consumption in thousands of 1012 joules FO g = 0.98 ± 1%
C g = carbon content in 106 tons per thousand 1012 joules = 0.0137 ± 2%
From crude oil and natural gas liquids production in the global-total accounts2 CO2l = CO2 emissions in 106 metric tons of carbon
Pl = annual production or consumption in 106 tons FOl = 0.918 ± 3%
Cl = carbon content in tons C per ton fuel = 0.85 ± 1%
From primary and secondary liquid fuel production and trade in the national accounts when non-energy liquid products are specifically subtracted3
CO2l = CO2 emissions in 106 metric tons of carbon Pl = annual production or consumption in 106 tons FOl = 0.985 ± 3%
Cl = carbon content in tons C per ton fuel = 0.85 ± 1%
From liquid bunker fuel consumption4
CO2l = CO2 emissions in 106 metric tons of carbon Pl = annual production or consumption in 106 tons FOl = 1.0 ± 3%
Cl = carbon content in tons C per ton fuel = 0.855 ± 1%
From primary and secondary solid fuel production and trade5 CO2s = CO2 emissions in 106 metric tons of carbon
P s = annual production or consumption in 106 tons coal equivalent6 FO s = 0.982 ± 2%
C s = carbon content in tons C per ton coal equivalent = 0.746 ± 2%
From natural gas flaring7
CO2f = CO2 emissions in 106 metric tons of carbon P f = annual production or consumption in 1012 joules FO f = 1.00 ± 1%
C f = carbon content in 106 tons C per 1012 joules = 13.454 ± 2%
Note: 1. With respect to the above gas-related calculations, the following procedures and assumptions should be noted:
(1) If a solid was produced and then converted to a gas that was subsequently consumed, the assumption was made that the solid was produced and consumed. In this situation, none of the gas records were influenced.
(2) If a solid was produced and then converted to a gas that was exported, it was assumed that in the producing country a solid was produced and the gas was exported. As a result, gas consumption for this country could show a negative value (consumption = production + imports exports: C = (0 + 0) exports). In the consuming country, gas was imported and consumed.
(3) Natural gas contains 13.7 metric tons of carbon per terajoule.
(4) Some of the units seem contrived but are chosen to accommodate data reported in the primary data sources.
2. With respect to the above global liquid-related calculations, the following procedures and assumptions should be noted:
(1) Crude petroleum, natural gas liquids, and all secondary energy liquids were summed on an equal basis in mass units. That is, a ton of any liquid contains the same fraction of carbon.
(2) When calculating global total CO2 emissions from liquids, we have estimated that a quantity of liquids equivalent to 6.7% of liquids produced are not oxidized each year and another 1.5% passes through burners unoxidized or is otherwise spilled. Hence, 91.8% of annual liquid production is oxidized each year.
(3) Liquid fuels contain 85.0% carbon by weight.
3. With respect to the above national liquid-related calculations, the following procedures and assumptions should be noted:
(1) Crude petroleum, natural gas liquids, and all secondary energy liquids were summed on an equal basis in mass units. That is, a ton of any liquid contains the same fraction of carbon.
(1) Crude petroleum, natural gas liquids, and all secondary energy liquids were summed on an equal basis in mass units. That is, a ton of any liquid contains the same fraction of carbon.