How to assess national decarbonization policies? A dynamic framework for evaluating energy efficiency and CO2 emissions in OECD nations aligned with the SDGs

The growing climate crisis has expedited the worldwide transition to a circular economy (CE) by increasing decarbonization initiatives such as renewable energy investments and environmental taxation. Nevertheless, the long-term effectiveness of such policies in mitigating ecological impacts remains underexplored. This study therefore investigates how national decarbonization policies influence energy efficiency and CO2 emissions over time. To address this, an innovative dynamic Data Envelopment Analysis (DEA) framework with feedback-based bidirectional carryovers is developed to assess decarbonization policy effects in 20 OECD countries. Integrating economic, environmental, and social indicators, the framework tracks the long-term effects of green investments and environmental taxation on national sustainability trends. Switzerland, Norway, and New Zealand emerge as the most efficient in decarbonization, whereas the United States and Japan remain high emitters. Sensitivity analysis using alternative input and carryover values confirm the stability of the results. The findings establish a benchmarking tool for policymakers seeking to align decarbonization outcomes with Sustainable Development Goals (SDGs) #7, #11, #12 and #13, emphasizing how leading countries accelerate their decarbonization transitions through adaptive policy measures, thereby offering valuable insights for developing economies.