Environmental and Economic-oriented Transport Efficiency: The Role of Climate Change Mitigation Technology

Transport sector is a vital aspect of economic and environment. However, it drastically contributes desirable and undesirable outputs to the economy and the environment due to its rapid development. Thus, transport efficiency related to the economy and the environment needs to be measured. Unlike existing studies that investigate environmental and economic impacts separately, this study analyzes the joint effect of economic and environmental factors. Furthermore, the role of transport-related climate change mitigation technology is also investigated using five inputs and three outputs for the period 2000 to 2020 for 35 OECD countries. This study employs two approaches: first, data envelopment analysis based on slack-based measure (DEA-SBM), and second, an advanced econometric method, i.e., cross-sectional dependence autoregressive distributed lag (CS-ARDL). DEA-SBM shows that all countries are efficient-related economic and environmental effects through the transport sector. CS-ARDL shows that transport-related climate change mitigation technology has a remarkable impact on efficiency levels. Moreover, the joint effect of environmental research and development and climate change mitigation technologies adversely impacts transport efficiency. Climate change mitigation technology related to air has a higher impact than railway and road on economic and environmental transport efficiency. Findings suggest that countries should focus on policy implications regarding transport inputs and desirable and undesirable outputs.