**6. Conclusions and Policy Implications**

Since the 1992 World Business Council for Sustainable Development publication "Changing Course", eco-efficiency has been an important indicator for the discussion on environmental sustainability. The focus of this research is to study how eco-efficiency has

changed over time and is likely to change in the future for a group of 18 major countries (G18) that are part of the G20. DEA is used to estimate eco-efficiency, and these values are used in constructing an eco-efficiency Malmquist productivity index, which is a useful ecological indicator. Analysis is conducted over the period 1996 to 2040 with actual data being used for the period 1996 to 2019 and forecasted data for the years 2020 to 2040.

For the G18, the average annual growth in MPI over the period 1997 to 2019 was 0.5%. Over this same time period, catch-up and frontier shift average annual growth rates were 2.5% and −0.2%, respectively, indicating that efficiency change was growing positively while technical change was regressing. Over the forecast period, 2019 to 2040, the average annual rate of change in MPI, catch-up, and frontier shift is forecast at −0.1%, −0.3%, and 0.2%, respectively. These values indicate that a slowdown in efficiency change is forecast to be the main reason for the decline in MPI. However, the small magnitude of these numbers indicates that even when eco-efficiency MPI growth is positive, the practical impact on eco-efficiency is likely to be slight.

Eco-efficiency leaders over the period 1997 to 2019 and 2019 to 2040 include Australia, Brazil, France, Germany, Great Britain, Italy, Japan, Russia, and the United States. Laggards include Canada, China, India, and Indonesia. These laggard countries recorded negative growth rates in eco-efficiency over the period 1997 to 2019 and 2019 to 2040. These results are important in establishing not only what country-level eco-efficiency currently looks like but also what eco-efficiency is likely to look like in the future.

There are several policy implications stemming from this research. First, increasing eco-efficiency should be a top priority for all G18 countries. A positive trend in ecoefficiency is desirable from an environmental sustainability perspective, but it does not mean that substantial increases in eco-efficiency are being realized or that there is no room for further improvement. It could be that eco-efficiency is increasing but at such a slow rate that improvements are only marginal. This is consistent with the current values of G18 ecoefficiency and future predictions as presented in this paper. In such cases, even countries with positive eco-efficiency growth could still fall well short of meeting their nationally determined contributions (NDCs) targets, as specified under the Paris climate change agreement [43]. Countries need to prioritize increasing eco-efficiency to the forefront of economic policy making. One way to do this is to incorporate environmental sustainability into industrial policy so that future economic growth embodies environmental quality. For example, industrial policy could be focused on developing composite materials that are more lightweight and less energy intensive to construct, and there could be a greater emphasis on life-cycle analysis. The transportation sector should move away from fossil fuel-powered engines to electric motors that use electricity generated from renewable energy sources. Second, the large variations in eco-efficiency between countries make it more difficult to negotiate international agreements on energy efficiency and climate change. In general, it is easier to gain consensus on policy matters when the members share a common ground. Third, the G18 are an important group of developed and developing countries that need to show leadership when it comes to increasing eco-efficiency. The G20 countries need to establish a non-partisan environment ministry that is focused on designing and implementing aggressive goals on increasing eco-efficiency, which are consistent with the UN's SDGs. Under the current G20 structure, the chair of the G20 rotates on a yearly basis, and this offers little in the way of substantial long-term commitment to environmental policy [44]. Hopefully, the impact of COVID, record hot temperatures in 2021, and the latest IPCC research on the effects of climate change will provide the appropriate stimulus for the G20 to take environmental sustainability more seriously.

**Funding:** This research received no external funding.

**Data Availability Statement:** Publicly available datasets were analyzed in this study [35,36].

**Acknowledgments:** I thank the Schulich School of Business for internal funding. I thank the anonymous reviewers for their helpful comments.

**Conflicts of Interest:** The author declares no conflict of interest.
