Benchmarking economy-wide energy efficiency trends and policies in Europe: Is there a convergence in emission performance towards the EU average?

Energy efficiency has become one of the “twin pillars” of sustainable energy policy along with renewable energy. Imported energy dependency rate in the EU (54%) and Turkey (75%) calls for a great need of an effective energy efficiency strategy. This study analyzes the cross-country energy efficiency performance for European countries over the period of 1995-2007. Two versions of non-parametric linear models with desirable output and undesirable output are used to trace energy efficiency changes over time as well as with respect to activity mix, sources of primary energy-use, share of renewables and changes in energy prices. The results indicate an improvement in energy efficiency over time but the efficiency scores and their improvement pace is considerably lower when environmental factors are taken into account. The empirical evidence also supports that energy mix and the activity mix of the economy and energy prices have significant effects on energy efficiency.