This thesis introduces a novel method to incorporate absolute values of greenhouse gas emissions into the measure of eco-efficiency. Previously, the measure of eco-efficiency has been criticised for allowing environmental damages to be compensated by economic gain. This study meets this criticism by incorporating sustainability into the measure of eco-efficiency. In order to measure efficiency, two environmental indicators were used, namely the consumption of fuels and heating to proxy for emissions of GHG and the consumption on nutrients to proxy the emissions from nutrients.
The absolute value of GHG emissions is incorporated by specifying a threshold of the consumption of fuels and heating. If a firm emits more than specified by the threshold-value, the efficiency-score is decreased proportionally. The threshold of absolute levels of GHG emissions is calculated using the Swedish environmental target of net-zero emissions in 2045. The empirical application is on Swedish dairy farms using the FADN (farm accountancy data network) with observations from 2016. It was assessed that Swedish dairy farms had low efficiency, but that the mean-efficiency increased when adjusting the scores towards the threshold of GHG emissions. In order to see what might cause the inefficiency, exogenous variables were regressed on the efficiency-scores.
The regression results provided the policy implication that increasing the intensity of farming would increase the eco-efficiency of all farms. It was also found that the regression results changed when adjusting the scores, pointing to the contribution to this novel addition to the method of measuring eco-efficiency.
Elin Martinsson Agronom - ekonomi
After having written my thesis on topics concerning agricultural economics, my interest in the subject has increased. I am also passionate about the climate and are aiming to work on climate-issues in my future career. My strongest drive is to be a part of shaping society and contributing to increasing sustainability. The favourite part of my studies has been to learn about how to evaluate and develop policies, and I’m looking forward to using these skills in my future work.