Renewable Energy Index: The Country-Group Performance Using Data Envelopment Analysis

Abstract

Renewable energy stands as a pivotal solution to environmental concerns, prompting substantial research and development endeavors to promote its adoption and enhance energy efficiency. Despite the recognized environmental superiority of renewable energy systems, there is a lack of globally standardized indicators specifically focused on renewable energy efficiency. This study aims to develop and apply a non-parametric data envelopment analysis (DEA) indicator, termed the Renewable Energy Indicator (REI), to measure environmental performance at the national level and to identify differences in renewable energy efficiency across countries grouped by development status and income level. The REI incorporates new factors such as agricultural methane emissions (thousand metric tons of CO2 equivalent), PM2.5 air pollution exposure (µg/m3), and aspects related to electricity, including consumption (as % of total final energy consumption), production from renewable sources, excluding hydroelectric (kWh), and accessibility in rural and urban areas (% of population with access), aligning with the emerging paradigm outlined by the United Nations. By segmenting the REI into global, developmental, and income group classifications, this study conducts the Mann–Whitney U test and the Kruskal–Wallis H tests to identify variations in renewable energy efficiency among different country groups. Our findings reveal top-performing countries globally, highlighting both developed (e.g., Sweden) and developing nations (e.g., Costa Rica, Sri Lanka). Central and North European countries demonstrate high efficiency, while those facing political and economic instability perform poorly. Agricultural-dependent nations like Australia and Argentina exhibit lower REI due to significant methane emissions. Disparities between developed and developing markets underscore the importance of understanding distinct socio-economic dynamics for effective policy formulation. Comparative analysis across income groups informs specific strategies tailored to each category.