DEA-Malmquist Method to Analyse Total-Factor Energy Efficiency for GCC Countries

Objectives: Carbon dioxide emissions are primarily produced as a result of energy consumption, and improving energy efficiency is a critical component in mitigating the effects of climate change. Total energy consumption in the GCC countries is expected to rise from 238.8 million tons in 2000 to 584 million tons in 2023. This study aims to assess the Total-Factor Energy Efficiency (TFEE), which influences energy efficiency in the GCC countries. Three inputs were used—labor, capital stock, and energy consumption—to evaluate energy efficiency in two key sectors: the transportation sector and the electricity sector. Methods: Data Envelopment Analysis (DEA) and the Malmquist Productivity Index were employed to measure energy efficiency in two models: the first model for the electricity sector, and the second model for the transportation sector in the GCC region. Results: The findings of the study reveal a general decline in energy efficiency across the GCC countries in both the electricity generation and transportation sectors. In the electricity model, the Total-Factor Energy Efficiency (TFEE) decreased by 3.9%, driven primarily by a 4% drop in technological change, although technical efficiency exhibited a slight improvement of 0.1%. Similarly, in the transportation sector, overall energy efficiency fell by 2.9%, largely due to a 2.8% reduction in technological change, accompanied by a marginal 0.1% decline in technical efficiency growth. Together, these results indicate that deteriorating technological progress is the main factor behind the downward trend in energy efficiency across both sectors.