How Efficiently are the EU Countries Coping with the Discrepancy between Economic and Environmental Goals

With growing evidence of natural resource depletion and environmental pollution, environmental issues became complementary to economic goals. Reduction of negative effects of human activities on the environment while enhancement of the use of alternative and renewable resources are now required together with satisfactory economic performance. The European Union made declarations to follow these goals in the Lisbon Strategy and consequently in the Strategy 2020. This paper examines to what extent these goals are fulfilled vis-à-vis EU member countries. Specifically, by performing Data Envelopment Analysis we provide an alternative way of assessing the ability of the individual EU countries to achieve these objectives. This ability is represented by relative effi-ciency scores of the EU members which reflect both economic and environmental goals. The paper finds that Denmark, Luxembourg, and Sweden are the most efficient countries, and also identifies the areas to be improved by the inefficient countries to reach the frontier.