Environmental efficiency of investments in renewable energy: Comparative analysis at macroeconomic level

This paper aims to bring into attention the concept of renewable energy investments' efficiency and to study one of the three concepts related to it, namely environmental efficiency of investments in renewable energy. The analysis is undertaken at macroeconomic level for several countries in Europe; some of them are member states of European Union and were observed over the period between 1990 and 2008. The method assumes the study of the econometric models based on Kaya identity, an equation widely used in studies regarding emissions, trends and future emissions scenarios. Working with time series and cross-sectional data, a panel data approach is needed. Indicators like energy intensity, CO2 intensity and gross domestic product per capita and per unit of investment are used, as they establish a connection between effects and efforts (a prerequisite for studying the efficiency). A novelty of this research lies in the calculation of environmental efficiency index after an original method proposed by authors. The findings of this analysis reveal that there are both countries with high and low environmental efficiency of investments in renewable energy.