**1. Introduction**

Measuring the efficiency of production systems is an important task in economic science, and different studies have addressed this problem with different methodologies. In regulated sectors, such as the electricity sector, the evaluation of productive efficiency has been promoted. Particularly, in the activity of electricity power generation, this stimulus is created by the dependence that exists on the traditional sources of generation, such as fossil sources, considering their impact on the environment caused by emissions of greenhouse gases (GHG) [1].

Electricity generation in the Latin American region has been largely composed of two types of sources: hydroelectric and fossil energy. In 2017, these two sources made up almost 88% of the total generation, at 47.52% and 40.25%, respectively. There has been an important change in the use of different types of energy compared to 1990—a time when there was almost total dependence on generation by these two sources, at 95.76% of the total, and there was also a greater relative importance of hydroelectric energy, which made up 65.69% of total energy compared to 33.43% of fossil sources [2].

Currently, developed and developing countries are concerned about increasing the proportion of renewable sources within their energy matrixes, which has resulted from essential decisions to address climate change [3]. This is supported by the fact that the electricity generation sector is the most important for CO2 emissions, followed by the transport sector and the industrial sector [4], although the use of renewable energy in Latin America and the Caribbean was lower in 2018, at 27.59% of the total, compared with its usage proportion in the rest of the world, at 41.93% [5]. To this extent, the comparison of the efficiency of electricity generation activity is a relevant task for policy makers, particularly considering the emissions caused by generation activity.

The aim of this research is to evaluate the evolution of the technical efficiency of the electricity generation sector of 24 countries in Latin America and the Caribbean during the period 2000–2016, with a dynamic slack-based DEA model from an output-oriented perspective. The proposed model considers a desirable output, an undesirable output and three inputs, of which two aim to capture the temporal interdependence in the generation activity, which are called link variables. In our model, the desirable output is the generation of electricity, while the undesirable output is the total CO2 emissions derived from the generation of electricity. Although Sánchez et al. [6] studied the evolution of the efficiency of electricity generation in Latin American countries between 2006 and 2013, they did not consider the possible temporal interdependence present in the activity, nor did they use the installed capacity in the different generation sources as inputs or assume a weak disposability between generation and CO2 emissions.

The contribution of this research is twofold at the country level: (1) it is the first study to incorporate the dynamic component of the DEA methodology, capturing the possible temporary interdependencies that exist in the generation activity when seen as a production system; and (2) it is the first investigation to capture the assumption of weak disposability between fossil generation sources and CO2 emissions, which affects the efficiency measures calculated by the DEA models.

The rest of the document is organized as follows. Section 2 presents the main studies related to the DEA methodology as applied to the electricity sector. Section 3 presents the methodology, which introduces the concepts that are used to capture the environmental and dynamic components, and the methodology of DEA assessment by a non-radial model is also given. Section 4 shows the descriptive statistics of the variables used in the evaluation; it also describes the electricity generation sector and presents the results of the calculated efficiency levels for the 24 countries based on the proposed dynamic DEA model. Section 5 presents the conclusions, discussions and limitations of the study.
