Eco-Efficiency Assessment for Some European Countries Using Slacks-Based Measure Data Envelopment Analysis

Abstract

One problem raised by the lack of energy efficiency is the generation of more greenhouse gases (GHGs) that can cause air pollution and climate change. Ecological efficiency (eco-efficiency) means the efficiency of resources used. A poor performance from this efficiency can then be detected for further improvement. In this research, we conduct an assessment on the eco-efficiency for some European countries as they consume a large part of global energy annually. A total of 17 European countries were selected as decision making units (DMUs) and assessed by the Slacks-based measure (SBM) Data Envelopment Analysis (DEA) model. Indices including Catch-Up, Frontier-Shift, and Malmquist Productivity Index (MPI) have been used to evaluate eco-efficiency, as well as efficiency change, technological change, and productivity change, over 2013-2017. In the model, energy consumption and share of renewable energy are used as energy inputs, and labor productivity and gross capital formation are used as economy inputs. On the other hand, GDP is used as a desired output, and CO 2 emissions is used as one undesired output. The experimental results show that the 17 countries as a whole lacked eco-efficiency in 2013-2017, implying more efforts are required to improve their eco-efficiency.Eco-efficiency is measurable based on selected input and output variables. For example, the authors of reference [2] measured the co-efficiency as the ratio between the value of what has been produced (e.g., GDP) and the environment impacts of the product or service (e.g., SO 2 emissions). The purpose of eco-efficiency measurement is to best utilize inputs such as energy, water, soil, and raw materials so as to maximize the benefit to human beings [4] or minimize bad outputs such as pollution and CO 2 , which can damage our environment. For every country in the world, improving eco-efficiency is necessary, as the protection of the environment is everyone's responsibility. Problem DefinitionOne problem raised by the lack of eco-efficiency is the generation of more greenhouse gases (GHGs), which can further lead to the global warming effect. The global warming effect, in turn, can lead to climate change, which might result in disasters and threaten the lives of human beings. International organizations have developed some programs to deal with the global warming effect. For example, the Paris Agreement initiated at the COP21 meeting held in December 2015 has set an objective to keep the rise in average global temperature below 2 • C [5]. The achievement of this difficult objective requires collective efforts from all countries. To achieve this objective, eco-efficiency is considered one of the effective approaches [6,7]. This is why the assessment of eco-efficiency has become the focus of this research. Though every country in the world needs to improve eco-efficiency, in this research, we focused on European countries, as they consume a lot of global energy annually. In fact, energy consumption, especially the use of fossil fuels, is one of the main s...

A Two-Stage DEA Model to Evaluate the Technical Eco-Efficiency Indicator in the EU Countries

“…Previous literature mentions that eco-efficiency measures are related to the economic output value obtained through the production process, considering existent environmental pressures from this production. Recent interest in estimating eco-efficiency through technical analysis emerged [ 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 ]. However, also recently, a content analysis study reveals that eco-efficiency has lost significance in favor of the circular economy discourse in the EU research funding programs of Horizon 2020, at least since the introduction of the 2011 Eco-Innovation Action Plan [ 32 ].…”

“…Eco-efficiency represents the efficiency of resources used [ 29 ]. [ 29 ] assessed through the slacks-based measure DEA model the eco-efficiency for 17 European countries concluding that more efforts are needed to its improvement.…”

“…Eco-efficiency represents the efficiency of resources used [ 29 ]. [ 29 ] assessed through the slacks-based measure DEA model the eco-efficiency for 17 European countries concluding that more efforts are needed to its improvement. Two outputs are used (the desired GDP pc and the undesired CO2 emissions pc), while energy consumption, labor productivity, the share of renewable energy in total energy consumption, and gross capital formation productivity are used as inputs.…”

“…Still, abatement opportunities were found to be still remarkable even after analyzing 18 years of data in 27 countries. Furthermore, [ 30 ] used GDP over CO2 emissions to account for eco-efficiency in German cities through DEA and the Malmquist productivity indexes also used by [ 29 ].…”

Analysis of green total factor productivity trend and its determinants for the countries along silk roads

“…An SBM model is an analytical model that measures input‐output inefficiency simultaneously. The Malmquist–Luenberger index calculated by SBM model can be used to introduce undesirable output into the model and measure the productivity more comprehensively (Arabi et al., 2015; Wang et al., 2020). Li and Chen (2019) explored GTFP from the perspective of enterprise bargaining power.…”