Is the environmental performance of industrialized countries converging? A ‘SURE’ approach to testing for convergence

In this paper, we test for convergence in the environmental performance of a sample of OECD countries, with data ranging from 1971 to 2002. First, we use Data Envelopment Analysis (DEA) to compute two environmental performance indicators (EPIs) in the production theory framework. Second, we propose the use of a sequential multivariate approach to test for convergence in environmental performance. These tests allow us to reconcile the time series literature with the cross-sectional dimension, which is basic when testing for convergence in regional blocs. The SURE technique is used, which allows for the existence of correlations across the series without imposing a common speed of mean reversion. The empirical results show that the group of countries as a whole, as well as the majority of countries considered on an individual basis (results for some countries vary between EPIs), are catching-up with Switzerland (the benchmark country).