Measurement of environmental efficiency and productivity: A cross country analysis

This paper measures environmental efficiency (EE) and environmental productivity (EP) and analyses differences in these across countries. It explores the macroeconomic factors that could explain these differences and whether these differences can be explained by income levels and by the degree of openness in these countries. The EE index is found to be almost steady over the period 1971-92 for the annex-I countries, while its value is declining for non-annex-I countries over this period. The EP index increased over this period in both groups of countries. In the annex-I countries, EE exhibits an inverted `U' shape with respect to per capita income while it is `U' shaped for the non-annex-I countries. This study also finds that while the EP index increases with income in annex-I countries it is decreasing in the non-annex-I countries. The degree of openness has a significant negative impact on EE and EP in both groups of countries.