Towards the green transition in the European regions. Assessing eco-efficiency in greenhouse gases emissions

A key objective of the green transition is to minimise the environmental impact of human activity while ensuring sustained economic progress. Efficiently allocating policy resources requires accurately measuring this intricate relationship. Eco-efficiency indicators are useful tools for this purpose, offering valuable insights to policymakers by assessing territories’ potential to minimise environmental impact while maintaining economic performance. This research calculates eco-efficiency scores in terms of greenhouse gas emissions, a major cause of global warming, for European Union regions in 2023. The results reveal significant disparities between and within countries. Generally, the Nordic and Western regions rank among the best performers, whereas the Central and Eastern European regions are mostly among the weakest performers. In a second stage, the paper addresses the study of the determinants of regional eco-efficiency. Relevant factors fostering performance include economic development, government quality, and social capital. Conversely, large industrial sectors hinder progress towards the green transition. These results emphasise the need for place-based policy interventions that prioritise technological upgrading, industrial diversification and innovation to foster emission reductions that are compatible with sustained economic growth. Moreover, reinforcing governance quality, institutional effectiveness and social capital can enhance policy implementation and sustain long-term eco-efficiency improvements.