Better to grow or better to improve? Measuring environmental efficiency in OECD countries with a stochastic environmental Kuznets frontier (SEKF)

The standard approach to the Environmental Kuznets Curve (EKC) holds that as a country develops and GDP per capita grows environmental degradation initially increases but eventually it reaches turning point where begins decline. takes many forms, one of them being emissions harmful gases. According EKC concept, can reduce by ‘growing’. implicitly assumes emits little possible for its economic development, whereas in reality, might emit above best attainable level emissions. Therefore, could be reduced before after becoming more environmentally efficient – i.e., ‘improving’ level. This article proposes Stochastic Frontier (SEKF) which is estimated CO2 OECD countries used benchmark each differently, thus, indicating how ‘grow’ and/or ‘improve’ Additionally, we analyse role stringency policies reducing country's carbon inefficiency measured distance from find widespread inefficiencies stringent market-based policies.