Energy efficiency and CO2 emissions in the UK universities

Understanding how energy efficiency improvement can mitigate CO2 emissions is critical for global climate change policies to ensure environmental sustainability and a low carbon future. Being the catalyst for training future generations, universities can play an instrumental role in this vision by adopting energy-saving and CO2 reduction strategies. We investigate how energy efficiency and affluence affect the emissions reduction experience of the UK universities. Using HESA data, a centralized system of reporting energy use and corresponding emissions, we adopt a two-step estimation strategy to first develop efficiency and activity indices for residential and non-residential energy use and emissions, and then to employ a two-step system GMM estimation procedure that captures the environment-economy-energy nexus to analyze the impact of the energy efficiency on CO2 emissions. For 122 UK universities over the period between 2008-09 and 2018-19, econometric results, which are robust to alternative specifications and restricted samples, confirm higher energy efficiency is conducive to lower emissions. However, the less-than-elastic relationship between energy efficiency and emissions implies that the UK universities will not be able to comply with their net-zero objectives unless they increase their investments in renewables and energy-efficient technologies. These findings will draw interests from pro-environment activists, university and government administrators, and policymakers.