This paper applies the modified undesirable dynamic data envelopment analysis (DEA) model by considering the role of forest carbon sinks to evaluate European countries' carbon dioxide (CO2) emissions and productivity efficiency. Taking population and energy consumption as input variables, gross domestic product (GDP) as the desirable input, CO2 as the undesirable output, and fixed assets as an inter-temporal carry-out input variable, our results suggest considering the fixed amount of the forest carbon sinks significantly affects efficiency rankings. The overall efficiency rankings for Ireland, Austria, Italy, Germany, Spain, and Belgium look to be overrated, while those of Finland, France, and Netherlands are apparently underrated. In terms of Total-Factor Efficiency analysis, countries with the best performance in efficiency ranking are Denmark, Luxembourg, Norway, Sweden, and the UK, thanks to their long-term effort at addressing the impact of forest carbon sinks and the effect of CO2 emissions on efficiency.
Keywords: Data envelopment analysis; Efficiency ranking; European Union countries; Forest carbon sinks.
© 2022. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.