Total-Factor Energy Efficiency (TFEE) and CO2 Emissions for GCC Countries

Abstract

Recently, the potential role of energy efficiency in energy transformation on the path to sustainable development has become a crucial topic. Over the past three decades, energy consumption and CO2 emissions in the Gulf countries have increased dramatically. This paper assesses the energy efficiency of Gulf Cooperation Council countries during the period 2000–2019. Thus, the contribution of this study to the energy policy literature is to measure the total-factor energy efficiency, in order to explore the current energy efficiency situation in the Gulf countries. This is the first study of the Gulf countries in terms of estimating the total-factor energy efficiency using the DEA–Malmquist method. The analysis shows that the average total factor productivity change index value was 0.964, with a decline rate of 3.6%. This demonstrates that energy efficiency in those regions has experienced a relative decline. The results of Malmquist analysis show that the total factor productivity change index for the Gulf countries is less than 1, which means a regression in their efficiency (energy inefficiency) from 2000 to 2019. This means that the decline in total-factor energy efficiency in those regions was mainly due to the technical progress index. The results of the study can help policy makers understand the current level of energy efficiency, and identify the main drivers of total-factor energy efficiency. Based on the results, some policy implications related to energy efficiency and suggestions for the GCC region were formulated.