Assessing the role of financial inclusion and financial development to improve energy and environmental efficiency

Environmental concerns are increasingly assuming prominence across the globe. Undesirable output such as carbon dioxide is the end-product of desirable productivity in energy and environmental measurement. Therefore, the current study uses data envelopment analysis to measure the energy and environmental efficiency of developed and developing countries from 2001 to 2020. In order to incentivize environmentally benign generation, undesirable outputs ought to be coupled in the evaluation of the performance of countries. One of the widely acclaimed approaches for evaluating efficiency is the Data Envelopment Analysis (DEA). Within this analysis, the traditional modeling in data envelopment analysis is expanded to incorporate a novel framework for efficiency evaluation amongst undesirable outputs. The novel efficiency estimate is extra robust, plus gives more extraordinary differentiating ability. The findings highlighted that the environmental efficiency was essentially minimal, whiles their spatial attributes increased in the East and decreased in the West, beyond more significant in the South as well as lower in the North. The findings equally show that Iceland obtained a perfect efficiency score of one for energy and environmental efficiency owing greatly to its reliance on geothermal energy which is emission-free energy. The finding is in line with the reality that the twofold data envelopment analysis model compares DMUo with the entire decision-making units in the technology, plus not only with empirical decision-making units.