G20 countries’ progress on the 7th SDG under circular economy DEA model

Abstract

The purpose of this paper was to analyze the performance of the G20 nations in terms of efficiency and productivity concerning achieving the seventh Sustainable Development Goal (SDG 7) of providing affordable and clean energy between 2010 and 2019 under a circular economy framework. The diagnostic tools to measure included the output-oriented Data Envelopment Analysis (DEA, SBM) to determine efficiency and the Malmquist Productivity Index (MPI) to measure productivity. In the DEA model, renewable energy is the primary energy source as inputs and outputs as total Greenhouse Gases (GHG) emissions, electricity consumption, and renewable energy consumption. The results indicated that the efficiency and productivity of developed and emerging countries towards the 7th SDG targets were heterogeneous throughout the analysis. The results showed that among the G20 countries that ranked as efficient were emerging countries (South Africa, Brazil, India, and China). Developed countries have more to gain in efficiency by designing strategies with sustainable development and environmental policies consistent with CE actions than emerging countries. In addition, since productivity gains increased more due to efficiency changes than technology gains, as indicated by the MPI analysis, it seems reasonable to infer that strengthening research and development of resource-efficient technologies could help to reach the 7th SDG faster by increasing productivity through adopting new technologies. In the short run, all countries could benefit from a multilateral effort to reduce climate change and GHG emissions if developed countries provided technological support to emerging countries and the latter offered carbon credits to the former in exchange for measures to mitigate the emissions resulting from their rapid economic growth driven by capital investment.