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A green leap forward: Environmental efficiency amidst natural resource and technological shifts

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  • Bashir, Muhammad Adnan
  • Qing, Li
  • Razi, Ummara
  • Xi, Zhang
  • Jingting, Lin

Abstract

Environmental efficiency optimises resource use and reduces ecological footprints; therefore, its evaluation is pivotal to achieving sustainable development goals 12 related to responsible consumption and production. This study examines the impact of natural resource management, banking development, technological innovation, and geopolitical risk on environmental efficiency in G-20 countries. The study applied Data Envelopment Analysis and Principal Component Analysis to measure environmental efficiency, incorporating modified Slack and Epsilon Based Measure approaches. The study analyses data from 1996 to 2020 using a robust Cross-Sectionally Autoregressive Distributed Lag model to draw inferences about the dynamic relationships governing environmental efficiency. The results indicate that natural resources have a consistent negative association with Slack and Epsilon-based environmental efficiency measures, suggesting that resource wealth may impede the adoption of energy-efficient practices. Banking development positively and negatively influences Slack and Epsilon's environmental efficiency, indicating that financial systems are critical in facilitating sustainable energy investments. Technological innovation emerges as a strong positive driver of environmental efficiency, aligning with the global emphasis on innovation as a pathway to sustainability. While less impactful, geopolitical instability shows a complex relationship with environmental efficiency. These insights are essential for G-20 nations as they strive to balance economic growth with environmental stewardship. The study provides compelling evidence to guide policy formulation, advocating for integrated approaches that influence financial innovation, technological advancement, and resource management to enhance environmental efficiency.

Suggested Citation

  • Bashir, Muhammad Adnan & Qing, Li & Razi, Ummara & Xi, Zhang & Jingting, Lin, 2025. "A green leap forward: Environmental efficiency amidst natural resource and technological shifts," Renewable and Sustainable Energy Reviews, Elsevier, vol. 216(C).
    • Handle: RePEc:eee:rensus:v:216:y:2025:i:c:s1364032125003594
    DOI: 10.1016/j.rser.2025.115686
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