Green Growth, Eco-Efficiency and Planetary Boundaries: An Empirical Approach

The climate change crises and the ecological breakdown call to improve human development without violating the safe operating space of the Earth. The Green growth theory relies on technological change and substitution among types of capital to improve eco-efficiency of the economy, while the planetary boundary approach requires a strong sustainability. The paper relies on this literature, to estimate countries’ efficiency in achieving income growth, human development and a sustainable development that lies within the planetary boundaries. Using the stochastic frontier analysis and state-of-the-art indicators for 190 countries from 2000 to 2019, results show the unfeasibility of green growth in the short run. High and upper-middle income countries are reducing their eco-efficiency, as measured by the Hickel’s Sustainable Development Index. There is a lack of a global decoupling of countries’ economic performance from the load on planetary boundaries, especially in terms of material consumption. Heterogenous results are detected among countries and their dynamic pattern. Several policy implications are discussed to revert the negative trend detected and incentivize a global ecological restoration.