Application of DEA Models to Develop Strategies for Improving the Energy Efficiency of National Economies: Focusing on SDGs and Best Practices in European Countries

Abstract

Objective: This study aims to develop a strategy for improving the energy efficiency of national economies through the application of DEA (Data Envelopment Analysis) models. The research focuses on adopting the best practices from European countries in the context of SDGs.   Theoretical Framework: The research is grounded in the framework of sustainable development and energy efficiency, focusing on the UN Sustainable Development Goals (SDG 12). DEA models are utilized to assess energy efficiency across various European economies, considering economic, environmental, and energy-related factors.   Method: DEA models were applied to assess energy efficiency by analyzing input variables such as energy intensity, CO₂ emissions, and energy consumption. The model used a comparative analysis of 38 European countries, with special attention to the weights (λ) in the VRS model, allowing for variable returns to scale. The data were sourced from Eurostat and the World Bank. Results and Discussion: The results indicated that countries like Ireland and Albania serve as key reference units for Ukraine, highlighting the effectiveness of transitioning to renewable energy sources and reducing dependence on fossil fuels. The analysis demonstrated that inefficient countries could improve their performance by following the strategies of their reference units, specifically in reducing energy consumption and emissions.   Research Implications: The study provides practical insights into how less efficient countries, like Ukraine, can enhance their energy policies by adopting successful practices from European nations, ultimately contributing to global sustainability goals.   Originality/Value: This research contributes to the literature by offering a structured methodology for enhancing energy efficiency in national economies through DEA modeling. It emphasizes the significance of renewable energy in sustainable development and presents a comparative framework applicable to a broad range of countries.