Measuring states of inefficiency and decoupling in the European Union

The climate change is a global externality that requires international efforts. The European Union has subscribed international agreements and internally has launched the European Union 2020 Strategy, with specific environmental targets. In this context, it is important to measure the environmental damage and economic growth relationship in the European Union. The paper aims to evaluate the decoupling of the gross domestic product and greenhouse gas emissions and to analyse the effects of population growth and gross domestic product on increase of greenhouse gas emissions and energy inefficiency in the members of the European Union. To do that, we use Data Envelopment Analysis models, which were applied to analyse the inefficiency levels and the population growth and gross domestic product decoupling of the 28 member countries of the European Union using data from the years 1995, 2000, 2005, 2010 and 2014. It was found that Luxembourg, Austria, Denmark, Malta, UK and Italy are the economies that turn out to be the most decoupled, and there is a reduction of inefficiency rates from 2010 to 2014 that could be affected by the great recession of 2009.