Analysis of Inter-Temporal Change in the Energy and CO₂ Emissions Efficiency of Economies: A Two Divisional Network DEA Approach

Abstract

Measuring changes in energy consumption and carbon dioxide emissions of various large economies is fundamental for analyzing the impact and effectiveness of various policies in this direction. This study analyzes intertemporal changes in energy and CO2 emissions efficiency of economies by applying a network data envelopment analysis approach that takes into consideration the internal structure of the analysis units. We have applied two divisional network data envelopment analysis models for analysis of the economic and distributive efficiency of economies from 2001 to 2011. The results are very useful in analyzing the situation; we found that none of the economies was efficient in both aspects in the sample period, implying that none of the countries in the analysis was efficient in the production and distribution of economic outputs simultaneously. Brazil, Canada, China and Germany showed improvement in economic efficiency but the distribution efficiency of the most of the economies is low because of the increase in population and high-income class. Most of the countries had an increase in the high-income class but China performed better in the second division because it has managed to improve its middle-income class in the recent past by moving more people from low-income class to middle income class. It is suggested that countries should emphasize on economic restructuring and expansion of the middle-income class to improve their performance in the production and distribution of economic outputs.

Keywords

• energy efficiency
• CO₂ emissions efficiency
• data envelopment analysis
• network DEA
• SBM