Countries around the world face the difficult task of reducing their contribution to global warming. In an attempt to accomplish this task, governments have implemented a variety of policies designed to curb greenhouse gas emissions, and in particular CO2, while not harming the economy. This is particularly problematic because of the close correlation between energy use (needed for economic activity) and emissions (caused by using fossil fuels as the sources of energy).
In reality, only a handful of countries successfully reducing their CO2 emissions. In order improve countries’ success rates, this research investigates which countries have been the most efficient in achieving high standards of living while using less energy, and especially producing lower CO2 emissions. Knowing which countries are succeeding can help identify the economic and environmental policies which might help less successful countries. Using Data Envelopment Analysis modeling (DEA), this paper compares 66 countries’ overall efficiencies between 1965-2015 based on their per capita GDP relative to their energy consumption and carbon dioxide emissions. The study compares countries that have low efficiency scores with efficient peer countries of similar size and income level. Ideally, the less efficient countries can learn from their more efficient peers and make policy changes that will bridge the gap between lower carbon emissions and higher incomes.