Evaluation of Sustainable Economic and Environmental Development Evidence From OECD Countries

Abstract

This study analyzes the economic and environmental performance of OECD countries over 2000–2019. A by-production approach is applied and the efficiency score is decomposed into its economic and environmental components. Unlike previous studies, we apply a refined model that allows for the correct modeling of by-production technology. The refined model can provide clear economic illustrations for balancing economic growth and environmental protection. The results indicate that environmental inefficiency is higher than the potential economic improvement. The environmental efficiency of OECD countries is improving, while economic performance is worsening over time. Therefore, instead of highly polluting energy, clean energy should be used to build a low-carbon economy. Worldwide, carbon-emitting countries and developed countries should shoulder their responsibilities to reduce carbon emissions and provide emission reduction funds for developing countries, while simultaneously sharing the green production technologies needed to reduce emissions.