Estimating environmental efficiency and convergence: 1980 to 2016

Abstract

Abstract Environmental performance assessment has been on the forefront of global economic growth discussions for the past decades. The study of efficiency growth and convergence is important to enable countries to evaluate their uses of inputs and embrace technologies to increase productivity. Using the Malmquist-Luenberger productivity index, this paper investigated the environmental performance of a panel of 104 countries over the period 1980 to 2016. Absolute and conditional beta convergence was analyzed and the possibility of clustering based on the club convergence was also analyzed. The findings show that average global environmental efficiency growth over the period is 1.3%. Convergence in environmental growth is conditional on industrial structure, globalization and energy price. The results also indicate the formation of club clusters in a sub sample of every decade but not in the entire period of study. Policy implications are also suggested.