A global level analysis of environmental energy efficiency: an application of data envelopment analysis

Abstract

The objective of this study is to estimate environmental energy efficiency (EEE)—defined as energy efficiency measures incorporating undesirable output in the production process—for high-income, middle-income and low-income economies as well as at the global level for the period 1993–2013. Under the broad framework of Data Envelopment Analysis, the traditional input-oriented measures of efficiency, the joint production approach and the latest by-production approach have been used to assess EEE. The empirical results confirm a gradual improvement in EEE level except in the years 1998–1999 and 2009. The high-income economies spearheaded this improvement in EEE followed by the middle-income and low-income economies. This might be explained by the use of a relatively greater share of renewable energy in high-income economies. Moreover, the middle-income economies appear to converge to global EEE levels while low-income economies have lagged behind. Policy implications of our results are also discussed.