Evaluating Environmental Efficiency of European Union Countries with the Approach of Network Data Envelopment Analysis

Today, increasing the world’s population and efforts of countries to achieve economic growth, this research, aims to study the variables affecting economic and environmental efficiency.

In the first part of the envelopment analysis of network data the economic efficiency of European Union (EU) countries was calculated according to the input variables. In the second part, the environmental efficiency of EU countries was evaluated based on the two important outputs of greenhouse gas emissions and the absorption of polluting gases. Finally, countries were ranked accordingly.

Correlation analysis showed that almost all input and output variables are positively correlated and thus meet the isotonic need. Likewise, all of them can be selected for evaluation using the DEA technique. Also the results indicated that 5 countries, including Denmark, France, Germany, the Netherlands, and the United Kingdom were efficient in the first stage. Besides, Cyprus, the Czech Republic, Ireland, Latvia, and Luxembourg were in the second step.

The results of this study showed that none of the countries was recognized as total efficiency. Thus, none of the countries were able to operate simultaneously in both the economic efficiency and the environmental efficiency phase.