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This study employs data drawn from the 2000 Agricultural Resource Management Survey, a U.S. Department of Agriculture-sponsored farmers' survey. The article estimates returns to scale relationships across dairy farms of different sizes and across different regions, incorporating variables hypothesized to influence farm performance. Results point to significant scale economies in U.S. dairy farms and underscore the importance of taking account of inefficiency when estimating scale economies. Contrary to previous research, the preferred cost function specification does not show a region of decreasing returns to scale. This finding helps explain why the average size of dairy farms has been increasing.

Using disaggregated panel data for the period 1996–2002, this paper estimates the cost efficiency of Romanian banks and relates it to regulation implemented by the National Bank of Romania. We estimate efficiency using a model that combines the frameworks of both stochastic frontier analysis and shadow cost functions. Our results indicate that, for all types of banks, the cost of technical inefficiency decreases in the years following tightening of regulation. A significant part of this decrease can be attributed to the policy change. Overall, the short-run increase in cost due to additional regulation exceeds the benefits from reduced technical inefficiency. However, our model does not account for other benefits, besides changes in X-inefficiency, such as stability of the banking system, which may be significant.

This study approximates the marginal abatement costs (MACs) of reducing GHG emissions in Canada using the shadow cost approach. Utilizing industry level data, we are the first to offer Canadian estimates based on a Hyperbolic Output Distance Function (HODF) and the stochastic frontier estimation. Accounting for GHG emissions caused by energy consumption, we obtain an average shadow MAC of $130/t across 30 industries. In the GHG-intensive industries such as the electric utilities and non-conventional oil extraction, MACs are lower than the CO2 levy of $50/t imposed by the federal government. Since these low-MACs sectors account for about 98 per cent of total GHG emissions and 94 per cent of total energy use in industries studied, the envisaged $50/t carbon levy could notionally result in a significant GHG abatement in Canada.

Evaluating the cost-effectiveness of GHG mitigation in the dryland agricultural sector is needed in terms of designing and implementing detailed and efficient mitigation programs, which is currently rarely covered by the literature. In this paper, we use a parametric directional distance approach to explore the farm-level abatement potential and cost (shadow value) of GHG for dryland farms in southwestern Australia. The study indicates that dryland agriculture could abate substantial GHG emissions and save agricultural inputs simultaneously. For the years 2006–2013, the average abatement potential ratios fluctuated between 17 and 33%, with a mean value of 21%. The mean shadow price of dryland agricultural GHG was $17.60 per tonne CO 2 -e in 2013 Australian dollars. In general, the analysis supports that reducing GHG in dryland agriculture is relatively cost-effective.

Negative externalities such as nitrogen (N) surplus that accompany dairy production activities are not usually accounted for in the market place since they are not costed. Using a parametric hyperbolic environmental technology distance function approach, we estimate the environmental efficiency and farm-specific abatement costs (shadow price) of nitrogen surplus in dairy farms on the island of Ireland (Northern Ireland and the Republic of Ireland). The methodology, unlike previous approaches (output/input distance functions), allows for asymmetric treatments of production outputs (desirable and undesirable outputs). We also analyse the farm level nitrogen pollution costs ratio and its determinants. The results of our analyses showed that the average environmental technical efficiency estimates for the Republic of Ireland and Northern Ireland are 0.89 and 0.92 and the mean abatement costs per kg of N surplus is €4.02 and €6.2 respectively. We found a reasonable degree of variation in the spectrum of abatement costs across the dairy farms with a relative increase observed over the years.

Distributed energy systems encompass a diverse range of generation and storage solutions on the user side, where decentralized management schemes to maximize the overall social welfare are preferred considering their dispersed ownership. However, either security or privacy problems occur in recently proposed schemes. Here we report a decentralized framework leveraging the strengths of blockchain and parallelizable mathematical algorithms to overcome these potential drawbacks. The system owners bid cost functions and operating constraints through masked but coupled management subproblems, which are redistributed by the blockchain to be verifiably solved by competent peers. Such processes are iteratively executed as decisions and shadow prices are exchanged among participants, until an equilibrium is reached. The interactive framework ensures decentralized, privacy-preserving, and secure management of multiple energy sources, and reduces the total cost by 3.0 ~ 7.5% in the test system. Our results benefit the energy prosumers and promote a more active and competitive power grid. Decentralized management of distributed energy sources for lower energy costs is of high interest. Here, authors show how privacy and security concerns are addressed under a decentralization framework through blockchain and parallelizable algorithms.

The reduction of carbon emissions has become an important climate issue worldwide. However, the diversity of carbon trading systems and the differentiation policy may generate incomparable carbon abatement costs across regions and countries. Based on the nonparametric model, this paper investigates the shadow price of carbon emissions and energy structure in 38 Asian countries from 1991 to 2019. The main findings of this paper are as follows: (1) The annual average shadow price of carbon emissions experienced a fluctuating decline for Asian countries during the period 1991–2000, followed by a continuous rise and then a fluctuating decline. (2) Industrialization may lead to a decline in carbon shadow price, while urbanization may lead to a rise in the opportunity cost of carbon reduction. (3) The carbon shadow price in countries of Asia–Pacific Economic Cooperation (APEC) is lower than that in non-APEC countries. (4) The structure of energy consumption is negatively related to marginal abatement costs, while on the contrary, the coefficients of the level of human resources are significantly positive. We also derive corresponding policy measures to promote intra-regional emission reduction.

Reducing emissions through the invisible hand of the market has become an important way to promote sustainable environmental development. The shadow price of carbon dioxide (CO2) is the core element of the carbon market, and its accuracy depends on the micro level of the measurement data. In view of this, this paper innovatively uses enterprise level input-output data and combines the stochastic frontier method to obtain CO2 shadow prices in China’s industrial sector. On this basis, the impacts of research and development (R&D) intensity, opening up level, traffic development level, population density, industrial structure, urbanization level, human resources level, degree of education, and environmental governance intensity on shadow price are discussed. In further analysis, this study introduces a Spatial Durbin Model (SDM) to evaluate the spatial spillover effects of CO2 shadow price itself and its influencing factors. The research results indicate that market-oriented emission abatement measures across industries and regions can reduce total costs, and it is necessary to consider incorporating carbon tax into low-carbon policies to compensate for the shortcomings of the carbon Emission Trading Scheme (ETS). In addition, neighboring regions should coordinate emission abatement tasks in a unified manner to realize a sustainable reduction in CO2 emissions.

Central government aims to stimulate the ejficiency and technical change c/public organizations. However, government primarily focuses on the institutions that deliver final public services, but not on the policy making institutions. This article analyses the productivity of central government departments (CGDs). From bureaucratic theory we hypothesize that productivity of these CGDs are low. In order to measure efficiency and technical change we estimate an average cost function based on data of Dutch individual CGDs during the period 2012-2019. The dataset consists of data on various services provided, resource usage and efficiency determinants. The cost function is estimated by a mixed-ejfect non-linear least squares method. The outcomes show that there are large efficiency deferences among CGDs. It is also striking that technical change of the CGDs is nonexistent over time, probably due to a lack of innovative behaviour; unwieldy bureaucracies and increasingly complex paperwork.

China needs to achieve its carbon peaking target with minimal economic costs. This paper proposes a framework for achieving the carbon peaking target that emphasizes economic effects. Based on the prediction, the parametric directional distance function (DDF) is adopted to calculate the total factor carbon emission efficiency and marginal carbon abatement cost in each region of China before 2030, and the allocation scheme of the abatement tasks necessary for carbon peaking is optimized from the perspective of least cost. The empirical results show the following: (1) The predicted rapid growth of China’s economy from 2020 to 2030 will lead to a rapid increase in marginal abatement costs, with the average marginal carbon abatement cost increasing from 8,833 yuan/ton to 15,077 yuan/ton. The cost of carbon emission reduction in the future is very expensive. (2) The measured marginal abatement costs in China are positively correlated with carbon emission efficiency. In order to ensure economic development, developed regions should try to maintain the development trend, while the central and western regions take on more emission reduction tasks. (3) The emission efficiency is improved by optimizing the allocation scheme of the abatement tasks required to reach the peak, and the scientific and orderly path to reach the peak of each province and the corresponding lowest economic cost are obtained. This paper are of great theoretical and practical significance for the initial quota allocation in carbon trading market and ensuring the achievement of carbon peaking target under economic effect. Graphical abstract