Measuring Environmental Efficiency: A Case Study of Thermal Power Generation in Jonoobi, Razavi and Shomali Khorasan Provinces

Thermal power plant emissions are considered as one of the most important environmental pollutions. In this study environmental efficiency of electricity industry for NOx emissions is calculated. Our data include 6 power plants of three Khorasan provinces for 1384-1387. We rely on hyperbolic translog distance function specification that treats the outputs asymmetrically by allowing equiproportional desirable outputs expansion and undesirable outputs contraction. This function is implemented by using conventional econometric techniques based on panel data maximum likelihood estimation. The result shows that environmental efficiency for this sample of plants is 93.81 on average. In addition, our estimated shadow price for each kilogram of NOx is 1.12 Rials. Results of this kind of studies can be useful for decision makers to have a better environmental prospect for planning.