Greenhouse gases emissions and Brazilian environmental efficiency

Abstract This paper aims to analyze the environmental efficiency of Brazilian municipalities and to relate it to a set of local socioeconomic characteristics, controlling technological heterogeneity and spatial dependence. A Metafrontier Data Envelopment Analysis (DEA) method has been applied to measure the efficiency, based on the Brazilian greenhouse gas emissions. Afterward we estimate a Spatial Autoregressive model (SAR) relating environmental efficiency to municipal socioeconomic characteristics. The main results show that variables such as income and HDI were positively related to the environmental efficiency. On the other hand, inequality and education showed negative relations. In addition, we found evidence of “environmental spillover” effect, which could indicate positive externalities when sustainable practices are implanted at reginal level.