Development of environmental performance and circular economy in the European Union countries: the case of “post-2004” members

Abstract

The study aims to compare the environmental efficiency within the group of European Union countries that joined the European Union in 2004 and later, and to identify the common circular economy determinants of efficiency. For this purpose, we performed Data Envelopment analysis and correlation analysis. We applied both constant and variable returns to scale models. Findings reveal that countries with a significant focus on services, particularly tourism, are more environmentally efficient. However, most countries are still heavily industry-oriented, with Bulgaria, Romania, and Croatia being the least efficient. The study also highlights the need for significant efforts to reduce greenhouse gas emissions. Interestingly, a positive correlation was found between resource productivity and the circular materials used, suggesting the importance of circular economy tools in improving the environment. Despite having a higher material and consumption footprint, these countries still produce a relatively high product and relatively low CO2 emissions. Based on these analyses, we found regional differences and the need for setting cluster policies within the circular economy at the European Union level.