Scandinavian Working Papers in Economics

CERE Working Papers,
CERE - the Center for Environmental and Resource Economics

No 2015:3: Energy Efficiency in Swedish Industry - A Firm-level Data Envelopment Analysis

Tommy Lundgren (), Shanshan Zhang () and Wenchao Zhou
Additional contact information
Tommy Lundgren: CERE, Postal: Department of Economics, Umeå University, S-901 87, Umeå, Sweden
Shanshan Zhang: CERE, Postal: Department of Economics, Umeå University, S-901 87, Umeå, Sweden
Wenchao Zhou: Centre for Regional Science, Postal: Centre for Regional Science, Umeå University, 90187 Umeå, Sweden

Abstract: This paper assesses energy efficiency in Swedish industry. Using unique firm-level panel data covering the years 2001-2008, the efficiency estimates are obtained for firms in 14 industrial sectors by using data envelopment analysis (DEA). The analysis accounts for multi-output technologies where undesirable outputs are produced alongside with the desirable output. The results show that there was potential to improve energy efficiency in all the sectors and relatively large energy inefficiencies existed in small energy-use industries in the sample period. Also, we assess how the EU ETS, the carbon dioxide (CO2) tax and the energy tax affect energy efficiency by conducting a second-stage regression analysis. To obtain consistent estimates for the regression model, we apply a modified, input-oriented version of the double bootstrap procedure of Simar and Wilson (Journal of Econometrics 136(1):31-64, 2007). The results of the regression analysis reveal that the EU ETS and the CO2 tax did not have significant influences on energy efficiency in the sample period. However, the energy tax had a positive relation with the energy efficiency.

Keywords: energy efficiency; EU ETS; data envelopment analysis; double bootstrap

JEL-codes: D22; D24; L60; Q41

29 pages, February 18, 2015

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