Shadow prices of agrochemicals in the Chinese farming sector: A convex expectile regression approach.

The use of agrochemical inputs has significantly enhanced agricultural yields in China; however, their excessive utilization has also caused a range of environmental issues. This paper examines the costs associated with reducing agrochemicals by employing shadow prices, which represent the value of the marginal product of agrochemicals, to further develop cost-effective environmental policy measures for reducing their usage. To this end, the shadow prices of agrochemicals have been assessed by adopting a newly developed convex expectile regression approach and using statistical data from 31 provinces in China spanning from 2005 to 2020. Furthermore, the present study investigates the disparities between shadow prices and market prices for different agrochemicals across various regions in China. The findings suggest that the costs of reducing chemical fertilizers are higher than those of reducing pesticides and plastic films. Moreover, the results indicate that central China exhibits relatively high potential for decreasing agrochemical usage. Finally, these findings can inform the Chinese government's restructuring of producer support and environmental policy in a cost-effective way to mitigate agrochemicals use in the future. Additionally, the research method employed in this study holds potential for extension to other agrochemicals-dependent countries.

Is the technical efficiency green? The environmental efficiency of agricultural production in the MENA region.

There is widespread recognition of the global environmental impact of agricultural production on greenhouse gas emissions, but evidence is sparse regarding the impact in the Middle East and North Africa (MENA) region. In this study, we treat agricultural emissions as an undesirable output from agricultural production and apply the directional distance function to measure environmentally-adjusted technical efficiency, defined as environmental efficiency in agricultural production, in six countries in the MENA region (Algeria, Egypt, Israel, Jordan, Morocco, Tunisia) during the period 1980-2016. The results show that all six countries have clear scope to improve their environmental efficiency. Agricultural production is greener in Jordan and Israel, while environmental efficiency is currently lowest in Egypt and Morocco. Estimated relative shadow price of agricultural emissions is -1.002, implying that the 'cost' of removing agricultural emissions is almost equal to the value of producing one unit of good output. These findings suggest there is a trade-off between agriculture emissions and production, which should be considered in efforts to enhance the sustainability of agricultural production in the MENA region.

Monetary valuation of unsorted waste: A shadow price approach.

Improving the management of municipal solid waste (MSW) is fundamental to promote circular economy and sustainability. Unsorted waste involves negative environmental impacts which often are ignored in economic feasibility studies due to its difficult valuation. In this study the shadow price of unsorted waste using the directional distance function was estimated. This methodological approach also allowed us to compute eco-efficiency scores of a set of municipalities in the provision of MSW services. The empirical application focused on a sample of 119 Chilean municipalities. The results showed that the average shadow price of unsorted waste was 297.66 €/ton which means that the environmental cost of left waste as unsorted was 297.66 € per ton. A regression tree model illustrated that population density, tourism intensity and the generation of waste per capita significantly influenced the shadow price of unsorted waste. Moreover, it was illustrated that Chilean municipalities were very inefficient in the management of MSW since the average eco-efficiency score was 0.272. The findings from this study reveal that additional and alternative policies should be adopted to improve the management of MSW and increase its recycling rate.

How can China achieve its goal of peaking carbon emissions at minimal cost? A research perspective from shadow price and optimal allocation of carbon emissions.

The Chinese government has declared a determination at the 75th United Nations General Assembly that China will improve its independent contribution and adopt more powerful measures to peak the carbon emissions before 2030. However, such strict implementation of carbon reduction policies is bound to bring the cost of sacrificing economic development. In such a context, this paper tries to use shadow price to measure the average social cost of emission reduction, marginal abatement cost to depict the pressure to reduce carbon emissions based on non-radial distance function, and provides an optimal scheme for provincial emission reduction to minimize the national cost of emission reduction based on variable-coefficient model. Results show that: First, the average value of shadow price is 15.91 and varies widely among regions, which means on average reducing one unit of carbon emissions will sacrifice 15.914 yuan RMB of economic output, and there exists possibility of carbon transactions across regions; Second, on the one hand, marginal abatement cost of carbon emission for most regions presents an upward tendency over time, which means greater economic costs have to be sacrificed with economic development in the future; On the other hand, marginal abatement cost is much higher in regions with high economic level than that in the economically undeveloped areas, which indicates reducing carbon emissions is becoming increasingly difficult and would pay more economical cost in economically developed regions; Third, the optional allocation scheme of CO2 reduction derived from this research is better than administrative ways of Grandfathering and Benchmarking in terms of minimizing emission reduction cost. Results of this paper indicate that larger carbon trading market can be implemented in China to economically fulfill the commitment of peaking carbon emissions.

Do marginal abatement costs matter for improving air quality? Evidence from China's major cities.

This paper performs a two-stage analysis to investigate the trade-off between economic growth and pollution abatement. We first estimate the marginal abatement costs (MACs) of CO2, SO2, NOx, and particulate matter (PM) for 30 major Chinese cities from 2006 to 2015 via the shadow price approach under the directional distance function framework. The results show that the optimal directional vector is (11, -1, -1, -1, -1), which may indicate that increasing economic output is much more important than reducing the above undesirable outputs in these cities. Then, having examined the relationship between MACs and air quality by panel regression and dose-response analyses, we found ranges of positive and statistically significant treatment effects for the MACs of SO2 and PM on their respective concentrations. The overall results suggest that government officials in these cities may give precedence to economic growth over environmental protection.

Efficiency assessment of wastewater treatment plants: A data envelopment analysis approach integrating technical, economic, and environmental issues.

The assessment of the efficiency of wastewater treatment plants (WWTPs) is essential to compare their performance and consequently to identify the best operational practices that can contribute to the reduction of operational costs. Previous studies have evaluated the efficiency of WWTPs using conventional data envelopment analysis (DEA) models. Most of these studies have considered the operational costs of the WWTPs as inputs, while the pollutants removed from wastewater are treated as outputs. However, they have ignored the fact that each pollutant removed by a WWTP involves a different environmental impact. To overcome this limitation, this paper evaluates for the first time the efficiency of a sample of WWTPs by applying the weighted slacks-based measure model. It is a non-radial DEA model which allows assigning weights to the inputs and outputs according their importance. Thus, the assessment carried out integrates environmental issues with the traditional "techno-economic" efficiency assessment of WWTPs. Moreover, the potential economic savings for each cost item have been quantified at a plant level. It is illustrated that the WWTPs analyzed have significant room to save staff and energy costs. Several managerial implications to help WWTPs' operators make informed decisions were drawn from the methodology and empirical application carried out.

Environmental efficiency of energy, materials, and emissions.

This study estimates the environmental efficiency of international listed firms in 10 worldwide sectors from 2007 to 2013 by applying an order-m method, a non-parametric approach based on free disposal hull with subsampling bootstrapping. Using a conventional output of gross profit and two conventional inputs of labor and capital, this study examines the order-m environmental efficiency accounting for the presence of each of 10 undesirable inputs/outputs and measures the shadow prices of each undesirable input and output. The results show that there is greater potential for the reduction of undesirable inputs rather than bad outputs. On average, total energy, electricity, or water usage has the potential to be reduced by 50%. The median shadow prices of undesirable inputs, however, are much higher than the surveyed representative market prices. Approximately 10% of the firms in the sample appear to be potential sellers or production reducers in terms of undesirable inputs/outputs, which implies that the price of each item at the current level has little impact on most of the firms. Moreover, this study shows that the environmental, social, and governance activities of a firm do not considerably affect environmental efficiency.

Measuring the carbon shadow price of agricultural production: a regional-level nonparametric approach.

Climate change poses an urgent threat, necessitating the implementation of measures to actively reduce carbon emissions. The development of effective carbon emission reduction policies requires accurate estimation of the costs involved. In situations where actual prices of commodities are not available in the market, shadow pricing provides a useful method to calculate relative prices between commodities with and without price information. However, most studies focus on the industry, with few contributions on agricultural sector. This paper estimates the shadow price of carbon emissions in the agricultural sector from a provincial perspective, incorporating the impact of livestock into the calculation of carbon emissions and shadow pricing. Our findings indicate that ignoring livestock may overestimate CSP values. On the whole, the level of carbon shadow price is rising, indicating good green development in China's agricultural sector. The two types of convergence results show that there is sigma convergence and beta convergence in the western and central regions, demonstrating a significant improvement in environmental performance.

A study on the two-level allocation of carbon emission quotas in China at the provincial level.

Carbon emission reduction is an essential means to achieve the "double carbon goal," and the scientific and reasonable allocation of carbon emission quotas (CEQ) is the basis for promoting carbon emission reduction. In this study, the first level was based on the entropy TOPSIS scores of provinces under the principles of fairness, efficiency, sustainability, and feasibility and used the K-mean clustering method to cluster the 30 provinces and allocate the CEQ to each zone group; the second level consolidated the impacts of the four principles and the marginal abatement costs of CO2 to allocate CEQ to the provinces within the zone group. Finally, each province's initial spatial balance of CEQ (ISBQ) is classified and evaluated. The study shows that the most quotas are for Guangdong, Zhejiang, and Inner Mongolia, and the least for Ningxia, Shanxi, and Guizhou. This study compares the results of CEQ allocation with the current carbon emission scale and finds that 11 provinces, such as Shandong and Hebei, show a deficit in future carbon emission space, and 19 provinces, such as Hainan and Beijing, show a surplus in carbon emission space. Given each province's different emission reduction tasks and pressures, differentiated emission control policies are the key to achieving China's "2030 target".

Aligning opportunity cost and net benefit criteria: the health shadow price.

Given constrained healthcare budgets and many competing demands, public health decision-making requires comparing the expected cost and health outcomes of alternative strategies and associated adoption and financing actions. Opportunity cost (comparing outcomes from the best alternative use of budgets or actions in decision making) and more recently net benefit criteria (relative valuing of effects at a threshold value less costs) have been key concepts and metrics applied toward making such decisions. In an ideal world, opportunity cost and net benefit criteria should be mutually supportive and consistent. However, that requires a threshold value to align net benefit with opportunity cost assessment. This perspective piece shows that using the health shadow price as the ICER threshold aligns net benefit and opportunity cost criteria for joint adoption and financing actions that arise when reimbursing any new strategy or technology under a constrained budget. For an investment strategy with ICER at the health shadow price Bc = 1/(1/n + 1/d-1/m), net benefit of reimbursing (adopting and financing) that strategy given an incremental cost-effectiveness ration (ICER) of actual displacement, d, in financing, is shown to be equivalent to that of the best alternative actions, the most cost-effective expansion of existing programs (ICER = n) funded by the contraction of the least cost-effective programs (ICER = m). Net benefit is correspondingly positive or negative if it is below or above this threshold. Implications are discussed for creating pathways to optimal public health decision-making with appropriate incentives for efficient displacement as well as for adoption actions and related research.

Can factor substitution reduce the shadow price of air pollution embodied in international trade? A worldwide perspective.

The calculation of trade-embodied air pollution (TEAP) and its economic losses can be reasonably used to assess the impact of transboundary air pollution. However, these air pollutants, which are associated with international trade, can be easily ignored due to their concealment. Based on this, the global multiregional input‒output model (MRIO) is used to quantify the volume of five air pollutants that are embodied in the trade of 20 countries from 2000 to 2016. Then, the shadow price of trade-embodied air pollution (SPTEAP) and the elasticity of factor substitution (EFS) are both calculated by applying the translog production function. Finally, impulse response analysis is used to study the dynamic impact of EFS on the SPTEAP. The main conclusions are as follows: (1) All countries experienced a mass transfer of TEAP, among which China and the USA are the developing and developed countries with the largest amount of TEAP transfers, respectively. (2) The SPTEAP and EFS vary greatly among countries, and these values are generally higher in developed countries than in developing countries. The relationship between the three EFSs can be expressed as [Formula: see text] in all countries, thus indicating that improving the technological level of a country is the best solution for reducing the TEAP in that country while incurring the lowest cost and the least difficulty. (3) Over the long run, the increase in [Formula: see text] and [Formula: see text] reduces the SPTEAP. Conversely, an increase in [Formula: see text] increases the SPTEAP. Therefore, policymakers should weigh these three factors according to the fluctuation of the SPTEAP and constantly adjust the allocation structure and ratio of these factors to maximize the benefits of transboundary air pollution governance.

How does civil aviation achieve sustainable low-carbon development? - An abatement-cost perspective.

With the rapid development of civil aviation, carbon emissions have brought severe environmental problems. Realizing efficient and sustainable carbon emission reduction is of great significance for achieving green development in civil aviation sector. Therefore, in the process of pursuing civil aviation carbon emission reduction goals, it is necessary to further consider how to achieve emission reduction at the lowest cost. Based on the accurate carbon emission performance evaluation, the carbon abatement cost among different representative airlines have been systematically compared. The main work and findings of this study can be summarized in the following three aspects. Firstly, a new nonparametric shadow price measurement method was constructed based on the Slacks-Based Measurement Data Envelopment Analysis (SBM-DEA). This can better reflect the essence of efficiency evaluation and the calculated shadow price results are more consistent with the real market. Secondly, the average value of carbon emission efficiency has experienced a fluctuating downward trend from 2011 to 2017, indicating that the carbon emission efficiency of global airlines has decreased. Thirdly, the average value of the shadow price is generally between 313.4 and 398.4 dollars/ton, showing an "up-down-up" trend, and reaching a peak of 398.4 dollars/ton in 2014. This can provide a basis for low-carbon policy makers in the civil aviation sector, and also provide reference for different types of airlines to achieve low-cost emission reduction.

Energy structure upgrade and carbon emission reduction: evidence from Asian economies.

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.

Analysis on the shadow price of carbon emissions from China's forestry fruit industry-taking peaches as an example.

The shadow price of carbon emissions can measure the marginal output effect under the carbon emission regulation and is also one of the key indicators to construct a low-carbon development path for production units. Currently, international research on shadow price is focused on the industrial and energy sectors. However, in the context of carbon peaking and carbon neutrality targets in China, the use of shadow price to study the cost of reducing emissions from agricultural production, especially forestry fruit industries, is significant. In this paper, we use a parametric approach to construct the quadratic ambient directional distance function. Using the input-output data of peach, we then calculate the environmental technical efficiency and shadow price of carbon emissions from peach production in Guangxi, Jiangsu, Shandong, and Sichuan provinces, and further estimate the values of green output in each province. The results show that (i) the environmental technology efficiency of peach production in Jiangsu province, located in the coastal plain area of eastern China, is the highest among the four provinces, while that in Guangxi province, located in the hilly area of southeast China, is the lowest. (ii) Guangxi province has the smallest carbon shadow price of peach production among the four provinces, while Sichuan province, located in the mountainous area of southwest China, has the largest. (iii) The green output value of the peach production in Jiangsu province is the highest among the four provinces, and that in Guangxi province is the lowest. In order to effectively reduce carbon emissions in peach production without affecting economic benefits, the paper puts forward the following suggestions: for peach-producing areas in the southeast hills of China, it is necessary to increase the application of green environmental technology while reducing the input of production factors in peach production. For peach-producing areas in the northern plains of China, the input of production factors should be reduced. It is not easy for peach-producing areas in the southwest mountains of China to reduce the input of production factors while increasing the application of green technologies. Finally, for peach-producing areas in China's eastern coastal plain, the implementation of environmental regulations for peach production should be gradual.

Equilibrium price estimation of green bonds from the perspective of resource allocation.

Green bonds offer substantial positive externalities compared to other types of bonds. This leads to a resource distribution efficiency that falls below the optimal level dictated by Pareto efficiency. It becomes essential to determine a means by which green bonds can achieve an equilibrium price, ensuring optimal public resource allocation and maximized social welfare. From the perspective of externalities, this study employs the carbon shadow price (CSP) to determine the equilibrium price of carbon emissions. Subsequently, this value aids in estimating the equilibrium price of green bonds. Firstly, we introduced an optimized bootstrap method to estimate the bias-corrected CSP at the provincial level in China from 2007 to 2020. Then, a pricing framework is developed, integrating both the carbon trading price and the estimated CSP, to determine the green bond's equilibrium price. Numerical simulations indicate that, under current conditions, green bonds cannot achieve the equilibrium price by relying solely on the carbon trading mechanism. Therefore, further development of China's carbon emissions trading market is required.

Calculation and Allocation of Atmospheric Environment Governance Cost in the Yangtze River Economic Belt of China.

Atmospheric environment governance requires necessary cost input. Only by accurately calculating regional atmospheric environment governance cost and scientifically allocating it within a region can the operability and realization of the coordinated governance of the regional environment be ensured. Firstly, based on the consideration of avoiding the technological regression of decision-making units, this paper constructs a sequential SBM-DEA efficiency measurement model and solves the shadow prices of various atmospheric environmental factors, that is, their unit governance costs. Secondly, combined with the emission reduction potential, the total regional atmospheric environment governance cost can be calculated. Thirdly, the Shapley value method is modified to calculate the contribution rate of each province to the whole region, and the equitable allocation scheme of the atmospheric environment governance cost is obtained. Finally, with the goal that the allocation scheme based on the fixed cost allocation DEA (FCA-DEA) model converges with the fair allocation scheme based on the modified Shapley value, a modified FCA-DEA model is constructed to achieve the efficiency and fairness of the allocation of atmospheric environment governance cost. The calculation and allocation of the atmospheric environmental governance cost in the Yangtze River Economic Belt in 2025 verify the feasibility and advantages of the models proposed in this paper.

How does China's industrial wastewater shadow price evolve? The perspective of spatiotemporal characteristics and differences decomposition.

To provide a reference for reducing the cost of industrial wastewater treatment and alleviate the pressure on water environment governance in China, we use the non-parametric dual evaluation linear analysis framework to estimate the shadow price of China's urban industrial wastewater (IWSP) with consideration of multiple inputs based on the data of 267 cities in China from 2003 to 2016. Then, we investigate the spatiotemporal characteristics of IWSP and analyze its sources of differences. Main conclusions are as follows: (1) Mean of China's urban IWSP increased from 645.54 yuan/ton in 2003 to 5662.64 yuan/ton in 2016, implicating the significant results and increasing difficulty of emission reduction policies. In addition, the Moran's I index of IWSP decreased from 0.056 to 0.002, implicating declining spatial correlation and differentiated green production processes in various regions. (2) From stock perspective, the σ convergence result shows that the IWSP of the country and each region gradually diverges, and the ß convergence results from incremental perspective show that the IWSP of a single region tends to converge in a steady state. Furthermore, regions with lower average shadow prices converge faster than regions with higher average shadow prices. (3) Using the Dagum Gini coefficient method, we find that the overall difference of IWSP dropped from 0.5758 to 0.3568. The intra-regional differences in each region continued to decline, as well as inter-regional differences. And the contribution rate of intensity of transvariation has risen from 33.71 to 60.80%, becoming the main reason for the imbalanced distribution of IWSP.

Analysis on shadow price and abatement potential of carbon dioxide in China's provincial industrial sectors.

CO2 emission performance evaluation is crucial to make abatement policies. Knowledge about the potential and costs of CO2 reduction could provide information guides for policymakers and help them implement targeted measures. However, relevant studies are rarely subdivided into detailed industrial sectors, and results are lack of inter-industry comparisons. To fill this gap, this study estimates provincial technical inefficiency, abatement potential, and shadow price of CO2 from fuel combustion in China's 25 industries in 2001-2017. Results show that China's industry could ideally reduce CO2 emissions by a further 22.01-33.27%, averaging 1645.96 MtCO2. Technical efficiency, abatement potential, and cost vary across provinces and industries and should therefore be fully considered when designing emission reduction targets and control policies. Provinces and industries with low technical efficiency, large-scale emissions, great abatement potential and low shadow price are the key to emission reduction. We thus identify key provinces and industries that need to take on more abatement responsibility. Those findings are of great significance to the formulation of carbon reduction targets and the implementation of abatement policies, and prove the feasibility of China's trans-regional carbon trading. It is suggested to prioritize key industries into the trading system and further promote inter-provincial cooperation through carbon trading.

Estimation of greenhouse gases shadow price in the English and Welsh water industry.

Moving to a more sustainable and low-carbon footprint urban water cycle is essential in the light of climate change. In this paper, we estimate the implicit cost of reducing greenhouse gas (GHG) emissions for several English and Welsh water companies from 2013 to 2019. Using econometric techniques, we compute the shadow prices of direct and indirect CO2 emissions associated with the provision of drinking water. This methodological approach also allows us to investigate the impact of a set of environmental variables on the costs of water companies and therefore on the costs of reducing GHG emissions. We then compute the returns to scale, technical change, and technical efficiency of the water companies. The empirical results show the following: (1) the average shadow price of CO2 across years was 0.114 £/kgCO2, which means that the English and Welsh water industry needs to spend an extra £0.114 in operating expenditure to prevent the emission of one kilogramme of CO2; (2) the cost of reducing GHG emissions is very variable among water companies and across years; (3) water taken from boreholes and average pumping head increases cost requirements and therefore the inefficiency of water companies; and (4) the water industry may lower its production costs and thus the costs of reducing GHG emissions by improving its daily operations and adopting new technologies. From a policy perspective, this study evidences that in the English and Welsh water industry, a market-based approach may be more suitable to reduce GHG emissions than a carbon tax policy.

Short-run forecast and reduction mechanism of CO2 emissions: a Chinese province-level study.

Rational prediction of future CO2 at the regional level is essential to the carbon emission reduction targets in China. The primary aim of this study is to examine the applicability of an up-to-date forecast algorithm, namely dynamic mode decomposition (DMD), in provincial CO2 emission prediction. The testing results validate the accuracy and application value of the DMD short-run forecast, which may provide method reference for relevant policy formulation and research areas. Moreover, the 2020 provincial economic situation and CO2 emissions in China are projected via DMD. On this basis, the unqualified provinces regarding CO2 emission reduction are identified considering the relative standard and absolute standard, and the corresponding mitigation paths are proposed through decoupling analysis and shadow price calculation. The results indicate that the unqualified provinces include Heilongjiang, Gansu, Shanxi, Hebei, Liaoning, Jilin, Shaanxi, and Inner Mongolia. The open-emission-reduction mechanism should be adopted in the first five provinces; the conservative one should be applied in the other provinces. Graphical abstract.