The carbon and production performance of water utilities: Evidence from the English and Welsh water industry

The path towards a sustainable water sector requires the assessment of production and carbon efficiency (eco-efficiency). In this study, we evaluate the production & carbon efficiency (PCE) of water companies under natural disposability and managerial disposability using the Range Adjusted Measure (RAM) non-parametric technique. This approach further allows quantifying the impact of each input on the performance of water companies. The results indicated that the mean PCE under natural disposability was 0.957 whereas the mean PCE under managerial disposability was lower, at the level of 0.783. This suggests that higher savings in carbon emissions could be achieved by improving management such as the adoption of carbon neutral technologies. Additionally, the savings in energy costs and other costs could potentially reach the level of 9.4% and 14.5% on average, respectively. By using bootstrap truncated regression techniques it has evidenced that the source of raw water and advanced water treatment impacted PCE of water companies.