Efficiency evaluation of developed and developing Asian countries using data envelopment analysis

Abstract

Despite being the world's fastest-growing economic region, almost half of the world's carbon emissions originate in Asia. The rising CO₂ levels over the last few decades have made energy efficiency a top priority in the fight against climate change. However, turning away from combustible organic fuels will not only reduce carbon emissions, but will also impede Asian countries' economic progress. Increasing efficiency is crucial for fostering economic growth and environmental protection. For performance analysis, this study used a two-stage Data Envelopment Analysis (DEA) model to measure energy use efficiency and economic efficiency in 35 Asian countries. First, the results show that 49% of Asian countries have energy use efficiency scores higher than the median, and only 20% have perfect energy use efficiency with a score of 1. This demonstrates that Asian countries must continue to increase their levels of energy efficiency to minimize the amount of CO₂ emissions. Second, the top ten most economically efficient countries are dominated by developed countries, while 71% of developing countries are economically inefficient. This illustrates the necessity for Asian emerging countries to accelerate their economic progress to reduce the income gap between the rich and the poor. The findings also reveal that high-income countries are not necessarily efficient, emphasizing that national economic policy should prioritize initiatives to boost economic production per capita over measures to increase aggregate economic growth.