Evaluating productive and ecological efficiencies of plants: An application of network DEA

As the environment deteriorates by time, ecological problems have drawn public attention worldwide. Environment protection becomes a popular issue in industrial countries in recent years. If without pollution control, the waste products from consumption, heating, agriculture, mining, manufacturing, transportation and other human activities, whether they accumulate or disperse, could have degraded the environment much more. In such setting, most plants of those which emit or effuse pollutants often have two functional parts. One part is the productive part which serves as producing goods and services. And the other is established for pollutant control. In this paper, we refer to the efficiency of the former and latter parts within a plant as productive efficiency and ecological efficiency respectively. The papers in DEA literature evaluate the plants´ efficiencies by treating the organizations as a whole. They obtain the overall efficiency by only considering the initial inputs and ultimate outputs. However, this makes improvement in efficiency difficult since the internal sub processes may affect the efficiency in this or that way. This paper proposes models for computing the efficiency of pollutive plants. Overall efficiency of organization is decomposed into productive efficiency and ecological efficiency through the intermediate undesirable outputs. In addition, models with different emphasis are formulated. According to the works presented, we propose a method to get the whole efficiency. At last, we give a numerical example of paper mills to illuminate our models.