Environmental performance evaluation using the frontier analysis framework

The environmental spillover effect of economic activities has been the uppermost concern of policymakers and academicians over the last two decades across Europe and beyond. It is also a major aim of forthcoming agricultural legislation in Scotland, and related legislation on, for example, nitrates, sustainable use of pesticides or water quality. The Scottish government has committed to achieving net zero greenhouse gas (GHG) emissions by 2045 and agriculture as a sector must decarbonise through the uptake of sustainable ‘win-win’ measures. These are practices or technologies which both maintain or enhance production whilst also reducing carbon emissions. Hence, environmental performance, on its own and in relation to productivity, is an important foundation to inform policy and industry initiatives aimed at reducing environmental impact. A proper evaluation of the environmental performance of farms and countries' production systems requires a tool that allows the integration of environmental concerns in the evaluation process (Tyteca, 1996). Environmental efficiency measurement using the frontier analysis framework is one of the environmental performance evaluation tools used in recent times. Yet, finding a universally agreed environmental efficiency measurement remains a challenge. The main aim of this brief is to provide an overview of the frontier-based approaches to measure environmental efficiency as an environmental performance indicator. We also highlight the work in progress on the environmental performance evaluation of Scottish agriculture using the Farm Business Survey (FBS) data.