*Article* **Eco-Efficiency for the G18: Trends and Future Outlook**

**Perry Sadorsky**

Schulich School of Business, York University, Toronto, ON M3J 1P3, Canada; psadorsky@schulich.yorku.ca

**Abstract:** Eco-efficiency is an important ecological indicator for tracking the progress of how countries' environmental-adjusted economic activity changes over time. The objective of this research is to calculate country-level eco-efficiency for a group of 18 major countries (G18) that are part of the G20. First, the data envelope analysis (DEA) method is used to calculate eco-efficiency scores. Second, the Malmquist productivity index (MPI) is used to examine how eco-efficiency changes over time. Eco-efficiency is forecast to the year 2040 using automated forecasting methods under a business-as-usual (BAU) scenario. Over the period 1997 to 2040, eco-efficiency varies widely between these countries with some countries reporting positive growth in eco-efficiency and other countries reporting negative growth. 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. Negative eco-efficiency growth points to a worsening of environmental sustainability. Large variations in eco-efficiency between countries make it more difficult to negotiate international agreements on energy efficiency and climate change. For the G18 countries, the average annual change in MPI over the period 1997 to 2019 was 0.5%, while the forecasted average annual change over the period 2019 to 2040 was a 0.1% decrease. For the G18 countries, there has been little change in eco-efficiency. The G18 are an important group of developed and developing countries that need to show leadership when it comes to increasing eco-efficiency.

**Keywords:** eco-efficiency; DEA; CO<sup>2</sup> emissions; forecasting; ecological indicators
