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

Area of Science:

• Environmental Economics
• Sustainable Development Studies
• Econometrics

Background:

• The European Union (EU) faces persistent challenges balancing economic growth with environmental protection.
• EU initiatives and Sustainable Development Goals necessitate robust environmental performance assessments.
• Understanding eco-efficiency evolution is crucial for policy development.

Purpose of the Study:

• To evaluate the temporal evolution of eco-efficiency across 27 EU countries from 2008 to 2018.
• To identify key environmental pollutants influencing eco-efficiency.
• To analyze the impact of specific greenhouse gases and atmospheric pollutants on eco-efficiency scores.

Main Methods:

• A two-stage analytical approach was employed.
• Stage one utilized non-parametric Data Envelopment Analysis (DEA) to compute eco-efficiency scores (GDP per capita/GHG emissions).
• Stage two employed a Fractional Regression Model (FRM) with pollutants as determinants.

Main Results:

• Carbon dioxide (CO2) emissions per area and nitrous oxide (N2O) emissions per area significantly improved EU eco-efficiency.
• Excluding highly efficient countries revealed that CO2 and methane (CH4) per area negatively impacted DEA scores.
• Ireland demonstrated the lowest greenhouse gas (GHG) and pollutant emissions, significantly reducing SOx and PM10, thereby increasing its eco-efficiency score.

Conclusions:

• Specific pollutant reductions, notably CO2 and N2O per area, enhance EU eco-efficiency.
• Country-specific emission reduction strategies, like Ireland's, are vital for improving overall environmental performance.
• Policy interventions targeting key pollutants are essential for sustainable economic growth in the EU.