Greenhouse gas performance of Korean local governments based on non-radial DDF

• Published in: Technological forecasting & social change 2018-10, Vol.135, p.13-21
• Main Authors: Lee, Hyoungsuk, Choi, Yongrok
• Format: Article
• Language: English
• Subjects: Air pollution; Air quality management; Analysis; Cities; Efficiency; Environmental auditing; Environmental policy; Governance; Green economy; Greenhouse effect; Greenhouse gas technical efficiency (GTE); Greenhouse gases; International economic relations; Local government; Measures; Non-radial DDF; Policy making; Prices; Scale efficiency; Shadow price; Shadow prices; Shadows; TMS (target management system)
• ISSN: 0040-1625; 1873-5509
• DOI: 10.1016/j.techfore.2018.07.011

This study aims to examine the greenhouse gas (GHG) performance of Korea from the perspective of local governments, based on the non-radial directional distance function (DDF). Since DDF is the methodology for the effective reduction of an undesirable variable, such as carbon or GHG emission, it is better to obtain more reliable empirical results for green growth performance in provinces of Korea. From the empirical results, we found that Seoul and Ulsan show the highest score in gas technical efficiency (GTE), implying that the performance of these two cities on GHG performance is worth of benchmarking. Secondly, we decomposed GTE into pure technical efficiency (PTE) and scale efficiency (SE), and found that Gwangju and Jeju showed unity in PTE scores, implying that these two cities are efficient in various returns to scale conditions. In addition, most of the local governments show high SE performance. Finally, we derived shadow price and found out the results for metropolitan cities belonging to the high shadow price group from the fact that they regulated GHG emissions more effectively. The results of this study offer very interesting and unique implications for policymakers among Korean central and local governments toward the sustainable governance and environmental policies. •We analyzed the environmental performance of 16 provinces in Korea.•By the decomposition of GTE, we examined pure technical efficiency and scale efficiency.•The paper examines the feasibility of the restructuring of the local economy with return to scale.•To find out the feasibility of the emission trading policy, the paper analyzes the shadow prices of the local governments.