Which Members of OECD are Inactive or Laissez-Faire at Reducing Greenhouse Gas Emissions

Ai-Chi Hsu¹, Po-Yuan Shih¹ and Ting-Wei Wu^2,

¹Department of Finance, National Yunlin University of Science & Technology, Douliu, Yunlin 64002, Taiwan

²Department of Information Management, National Yunlin University of Science & Technology, Douliu, Yunlin 64002, Taiwan

Cite this paper:
Ai-Chi Hsu, Po-Yuan Shih and Ting-Wei Wu. Which Members of OECD are Inactive or Laissez-Faire at Reducing Greenhouse Gas Emissions. Journal of Finance and Economics. 2023; 11(2):82-91. doi: 10.12691/jfe-11-2-3

Abstract

Global climate change has become a global challenge. Greenhouse gases are one of the leading causes of climate change, especially the emission of carbon dioxide and other greenhouse gases. The emissions of these gases mainly come from human activities such as energy production and use, industrial activities, transportation, and agriculture. The international community has adopted various agreements to reduce global greenhouse gas emissions and achieve climate goals in response to climate change. However, achieving greenhouse gas targets is about more than just reducing overall emissions. Economic efficiency must also be considered. Economic efficiency refers to the maximum effect achieved in achieving a specific goal: the maximum greenhouse gas reduction effect at the least cost. This study analyzed the economic and greenhouse gas emission reduction efficiency of OECD member countries through the two-stage data envelopment analysis method. And, using quartiles, the OECD member countries' comprehensive efficiency grouping to distinguish which countries are inactive in greenhouse gas emission reduction or countries that are laissez-faire. Finally, the study found that Iceland, Luxembourg, and Ireland chose not to curb greenhouse gas emissions to pursue economic development, while Latvia engaged to do both. Meanwhile, Australia, Canada, and the United States have adopted a laissez-faire approach, making no effort to rein in greenhouse gas emissions and boost national economic growth. The results of this study will provide the United Nations and international organizations with a policy reference to promote the reduction of global greenhouse gas emissions.

Keywords:
greenhouse gas reduction air pollution data envelopment analysis efficiency analysis GDP

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