Asymmetries in energy consumption: Efficiency of public spending across Portuguese municipalities
-
DOIhttp://dx.doi.org/10.21511/pmf.13(2).2024.10
-
Article InfoVolume 13 2024, Issue #2, pp. 110-128
- 68 Views
-
6 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
The efficient allocation of public financial resources to energy consumption in Portuguese municipalities is one of the most discussed topics in public finance, given the growing relevance of sustainability and energy efficiency. The study analyzes how public spending affects energy efficiency through a combination of data analysis and hypotheses testing to assess the relationship between public spending and energy consumption. The methodology includes DEA analysis of the financial data and energy consumption of the municipalities, as well as the definition of hypotheses to determine the possible correlations between investment and efficiency. The results suggest that, in general, municipalities with higher levels of public spending have lower levels of energy efficiency. Meanwhile, municipalities with smaller budgets and fewer resources tend to be more efficient. The DEA analysis of the data suggests that energy efficiency is not directly related to the size and/or economic aptitude of municipalities but rather to their ability to adopt new technologies and more efficient budgetary and financial management practices. The hypotheses tested show varying levels of efficiency in public spending in relation to energy consumption. The study also concludes that public policies should focus on technological innovation and benchmarking to improve energy efficiency. The analysis suggests that collaboration between municipalities and the adoption of best practices are essential to tackle regional disparities and promote energy sustainability.
Acknowledgments
This article is financed by Instituto Politécnico de Lisboa [Polytechnic Institute of Lisbon].
- Keywords
-
JEL Classification (Paper profile tab)Q48, R11, O13
-
References41
-
Tables5
-
Figures1
-
- Figure 1. The most (green) and least (red) financially efficient municipalities in terms of energy expenditure in 2018–2022
-
- Table A1. Results for the efficiency of public spending on energy, by municipality, in 2018
- Table A2. Results for the efficiency of public spending on energy, by municipality, in 2019
- Table A3. Results for the efficiency of public spending on energy, by municipality, in 2020
- Table A4. Results for the efficiency of public spending on energy, by municipality, in 2021
- Table A5. Results for the efficiency of public spending on energy, by municipality, in 2022
-
- Afonso, A., & Fernandes, S. (2006). Measuring local government spending efficiency: Evidence for the Lisbon region. Regional Studies, 40(1), 39-53.
- Aktaş, E. (2023). Green budgeting and long-term fiscal sustainability. In Ş. Koç & A. Çevik (Eds.), Issues on sustainability, economics & history. Ijopec Publication.
- Antunes, J., Neves, J., Elmor, L., Araújo, M., Wanke, P., & Tan, Y. (2023). A new perspective on the U.S. energy efficiency: The political context. Technological Forecasting and Social Change, 186(A), Article 122093.
- Awan, U., Shamim, S., Khan, Z., Zia, N., Shariq, S., & Khan, S. (2021). Big data analytics capability and decision-making: The role of data-driven insight on circular economy performance. Technological Forecasting and Social Change, 168, Article 120766.
- Bai, Y., Niu, J., & Hao, Y. (2012). Research of regional energy efficiency based on undesirable outputs and its influential factors: A case of western China. Energy Procedia, 16, 802-809.
- Bang, S. (2020). Performance evaluation of energy research projects using DEA super-efficiency. Energies, 13(20), Article 5318.
- Bartle, J., Kriz, K., & Morozov, B. (2011). Local government revenue structure: Trends and challenges. Journal of Public Budgeting, Accounting & Financial Management, 23(2), 268-287.
- Bensoussan, B., & Fleisher, C. (2008). Analysis without paralysis: 10 tools to make better strategic decisions (2nd ed.). Pearson Education.
- Borja-Patiño, J., Robalino-López, A., & Mena-Nieto, A. (2024). Breaking the unsustainable paradigm: Exploring the relationship between energy consumption, economic development and carbon dioxide emissions in Ecuador. Sustainability Science, 19, 403-421.
- Caneparo, L. (2020). Financing the (environmental) quality of cities with energy efficiency investments. Sustainability, 12(21), Article 8809.
- David, A., Yigitcantar, T., Li, R., Corchado, J., Cheong, P., Mossberger, K., & Mehmood, R. (2023). Understanding local government digital technology adoption strategies: A PRISMA review. Sustainability, 15(12), Article 9645.
- Dias, L., Simões, S., Gouveia, J., & Seixas, J. (2019). City energy modelling: Optimising local low carbon transitions with household budget constraints. Energy Strategy Reviews, 26, Article 100387.
- Edejer, T., Baltussen, R., Adam, T., Hutubessy, R., Acharya, A., Evans, D., & Murray, C. (2003). Making choices in health: WHO guide to cost-effectiveness analysis. Geneva: World Health Organization.
- Ettorchi-Tardy, A., Levif, M., & Michel, P. (2012). Benchmarking: A method for continuous quality improvement in health. Healthc Policy, 7(4), e101-e119.
- Geraldi, M., & Ghisi, E. (2022). Data-driven framework towards realistic bottom-up energy benchmarking using an artificial neural network. Applied Energy, 306, Article 117960.
- Heinelt, H., & Lamping, W. (2018). Policy choice in local responses to climate change: a comparison of urban strategies (1st ed.). Taylor & Francis.
- Hua, Q., Liu, G., Sun, D., & Zhu, L. (2022). Spatial effects of technology market development on energy efficiency: Heterogeneity analysis based on the characteristics of technology market. Technological Forecasting and Social Change, 185, Article 122008.
- Huang, K., & Wang, J. (2022). Research on the impact of environmental regulation on total factor energy effect of logistics industry from the perspective of green development. Mathematical Problems in Engineering.
- Jaffe, A., & Stavins, R. (1994). The energy-efficiency gap: What does it mean? Energy Policy, 22(10), 804-810.
- Li, S., Wu, M., & Song, M. (2023). Analysis of regional differences in green energy efficiency in countries along “the belt and road” initiative zone: based on super efficiency DEA model and Malmquist index method. Frontiers in Energy Research, 11.
- Lovins, A. (1976). Energy strategy: The road not taken? Foreign Affairs, 55(1), 65-96.
- Ma, S., Li, S., Luo, Q., Yu, Z., & Wang, Y. (2024). Revisiting the relationships between energy consumption, economic development and urban size: A global perspective using remote sensing data. Heliyon, 10(5), Article e27318.
- Ma, X., Liu, Y., Wei, X., Li, Y., Zheng, M., Li, Y., Cheng, C., Wu, Y., Liu, Z., & Yu, Y. (2017). Measurement and decomposition of energy efficiency of northeast China: based on super efficiency DEA model and Malmquist index. Environmental Science and Pollution Research, 24, 19859-19873.
- Martínez-Peláez, R., Ochoa-Brust, A., Rivera, S., Félix, V., Ostos, R., Brito, H., Félix, R., & Mena, L. (2023). Role of digital transformation for achieving sustainability: Mediated role of stakeholders, key capabilities, and technology. Sustainability, 15(14), Article 11221.
- Mega, V. (2018). Eco-responsible cities and the global ocean: Geostrategic shifts and the sustainability trilemma. Springer International Publishing.
- Mozaffari, M., Gerami, J., & Jablonsky, J. (2014). Relationship between DEA models without explicit inputs and DEA-R models. Central European Journal of Operations Research, 22, 1-12.
- Nath, S., & Madhoo, Y. (2022). Vanishing borders of urban local finance: Global developments with illustrations from Indian federation. Springer Nature Singapore.
- Nguyen, C., & Su, T. (2022). The influences of government spending on energy poverty: Evidence from developing countries. Energy, 238, Article 121785.
- O’Loughlin, C., & Wilson, P. (2021). Benchmarking the performance of US municipalities. Empirical Economics, 60, 2665-2700.
- Putri, S. (2014). Super efficiency with 2-stage DEA model. International Journal of Engineering Research & Technology, 3(4), 941-947.
- Shabalov, M., Zhukovskiy, Y., Buldysko, A., Gil, B., & Starshaia, V. (2021). The influence of technological changes in energy efficiency on the infrastructure deterioration in the energy sector. Energy Reports, 7, 2664-2680.
- Simpson, N., Simpson, K., Shearing, C., & Cirolia, L. (2019). Municipal finance and resilience lessons for urban infrastructure management: A case study from the Cape Town drought. International Journal of Urban Sustainable Development, 11(3), 257-276.
- Singh, H. (2015). Project management analytics: A data-driven approach to making rational and effective project decisions. Pearson Education.
- Soares, R. (2024). Evaluating the efficiency of public expenditure in municipal waste collection: A comparative study of Portuguese municipalities. Environmental Economics, 15(1), 203-216.
- Sorrel, S., Gatersleben, B., & Druckman, A. (2020). The limits of energy sufficiency: A review of the evidence for rebound effects and negative spillovers from behavioural change. Energy Research & Social Science, 64, Article 101439.
- Taşkın, D., Dogan, E., & Madaleno, M. (2022). Analyzing the relationship between energy efficiency and environmental and financial variables: A way towards sustainable development. Energy, 252, Article 124045.
- Vine, E., Hamrin, J., Eyre, N., Crossley, D., Maloney, M., & Watt, G. (2003). Public policy analysis of energy efficiency and load management in changing electricity businesses. Energy Policy, 31(5), 405-430.
- Wade, R. (2018). Governing the market: Economic theory and the role of government in East Asian industrialization. Princeton University Press.
- Yang, M., & Yu, X. (2015). Energy efficiency: Benefits for environment and society. Springer London.
- Yu, Y., Huang, J., & Zhang, N. (2018). Industrial eco-efficiency, regional disparity, and spatial convergence of China’s regions. Journal of Cleaner Production, 204, 872-887.
- Zhang, D., Mohsin, M., Rasheed, A., Chang, Y., & Taghizadeh-Hesary, F. (2021). Public spending and green economic growth in BRI region: Mediating role of green finance. Energy Policy, 153, Article 112256.