Estimating environmental efficiency of the selected Asian countries: does convergence exist?

Area of Science:

• Environmental Economics
• Sustainable Development Studies
• Econometrics

Background:

• Rising energy consumption in production drives environmental degradation.
• Environmental efficiency has emerged as a key concept for sustainable growth over the past three decades.
• Addressing environmental concerns is critical for national and global policy.

Purpose of the Study:

• To estimate environmental efficiency in 43 Asian countries from 1990-2019.
• To analyze the trends and drivers of environmental productivity using the Malmquist-Luenberger index.
• To identify countries with leading and lagging environmental performance for policy insights.

Main Methods:

• Utilized the Malmquist-Luenberger productivity index (MLI), an econometric approach for undesirable outputs.
• Employed annual data from 43 Asian countries (1990-2019).
• Input variables included labor, capital, and energy; output variables were CO2 emissions and GDP.

Main Results:

• Average environmental efficiency in Asian countries decreased by 0.3% annually.
• Cambodia, Turkey, and Nepal exhibited the highest total factor productivity (TFP) growth.
• Kuwait, Mongolia, and Yemen demonstrated the lowest TFP growth rates.

Conclusions:

• Asian countries show varied environmental efficiency trends, with some excelling in balancing development and sustainability.
• Factors like foreign direct investment, population density, inflation, industrialization, and globalization influence environmental convergence.
• Policy interventions are needed to enhance environmental efficiency and promote sustainable development across Asia.