Finding the balance between economic development and environmental protection is a major problem for many countries around the world. Air pollution caused by economic growth has caused serious damage to humans' living environment, and as improving energy and resource efficiencies is the first priority, many countries are targeting to move towards a sustainable environment and economic development. This study uses the modified dynamic SBM (slack-based measure) model to explore the economic efficiency and air pollutants emission efficiency in Taiwan's counties and cities from 2012 to 2015 by taking labor, motor vehicles, and electricity consumption as inputs and average disposable income as output. Particulate matter (PM2.5), nitrogen oxide emissions (NO2), and sulfur oxide emissions (SO2) are undesirable outputs, whereas factory fixed assets are a carry-over variable, and the results show the following: (1) the regions with the best overall efficiency between 2012 and 2015 include Taipei City, Keelung City, Hsinchu City, Chiayi City, and Taitung County; (2) in counties and cities with poor overall efficiency performance, the average disposable income per household has no significant relationship with air pollutant emissions; (3) in counties and cities where overall efficiency is poor, the average efficiency of each household's disposable income is small; and (4) except for the five counties and cities with the best overall performance, the three air pollutants in the other fourteen counties and cities are high. Overall, the air pollution of most areas needs improvement.
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