ABSTRACT
This study emphasizes the importance of controlling escalation of emissions in the current decade. In addition, the study focuses on efficiency techniques and the Total-Factor Productivity (TFP) of manufacturing industry in 33 provinces in Indonesia. This research was conducted by utilizing Data Envelopment Analysis (DEA). The input variables were labor, energy consumption and investment, and the output variables were GDP, SO2 and NO2. The Malmquist-Luenberger (ML) productivity index was used to measure changes in productivity of observation data using undesirable variables as input or output. The result is based on operational efficiency; at the end of the observation (2015), 17 provinces were in a state of operational inefficiency with efficiency scores in the range of 0.750-0.999. Meanwhile, in the results for technical efficiency, there was a trend for increasing technical efficiency in manufacturing industry in 19 provinces. Thus, it can be concluded that the majority of manufacturing industries in Indonesia are efficient, while only a few provinces can increase their productivity by increasing desirable output while reducing the growth rate of undesirable output production.
