Economic, Environmental, and Energy Equity Convergence: Evidence of a Multi-speed Europe?

The EU has committed to make Europe the first climate-neutral continent by 2050. Reaching this objective requires massive changes in the region. The biggest challenge is that the green transition happens without sacrificing economic progress and guaranteeing justice and inclusiveness. This pledge implies that every country be capable of addressing the trade-offs between targets while remaining committed towards the common decarbonisation goal. Our paper analyses the success with which countries are carrying out the energy transition. We propose an enhanced hyperbolic distance function and a stochastic frontier analysis approach to model the joint attainment of economic development, environmental sustainability, and energy equity. We apply our model to an unbalanced panel dataset of 29 European countries for the period 2005–2018. Our estimates show that the average performance of the economies has improved over time. The results also highlight the pivotal role of a sustainable economic development with clean energies for both slashing CO2 emissions and fostering energy equity. Moreover, we find convergence in countries' performance, being this convergence slightly higher for the EU-15 countries compared to the rest. Finally, we show that a higher share of renewable energy sources helps countries that are lagging behind to reach their optimal performance level.