Sustainable development initiatives address the issues related to economic growth and mobility, and environmental conservation. Sustainable transportation in the U.S. is an essential component of these initiatives. In this context, since the U.S. is a federally governed country, the needs for policy making can be different from one state to another, which requires state-by-state focus prior to sustainability assessment projects. This study aims to contribute to the scholarship by proposing a slack-based measurement data envelopment analysis (SBM-DEA) model with non-radial approach. This study assesses environmental efficiency of U.S states' transportation sectors from 2004 to 2012. In addition to the environmental efficiency measurement, carbon efficiency, and potential carbon reduction were estimated for the states of the U.S. SBM-DEA provided more comprehensive analysis that combines economic and environmental indicators. This approach also captures the excess input and undesirable output (CO2), and shortfall of desirable output. The findings of this study revealed that the states' transportation sectors are environmentally inefficient showing that on average states had an environmental efficiency score below 0.64. Therefore, the states need to substantially reduce carbon emissions to improve environmental efficiency of transportation.
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