Efficiency of Public Spending on Environmental Protection: The Role of Renewable Energy, Governance and Fossil Fuel Subsidies

ABSTRACT Climate change, biodiversity loss, and pollution pose a growing threat to ecosystems and human well‐being, prompting a call for action within the framework of the UN Decade of Ecosystem Restoration and Sustainable Development Goal 15 (SDG 15). This study assesses the efficiency of public spending on environmental protection in UN member countries and analyzes how various exogenous factors, such as renewable energy consumption and governance structure, affect this efficiency. One of the goals of ecosystem improvement is to eliminate fossil fuels, but many countries continue to subsidize them, a policy that reduces the efficient management of environmental protection spending. Using Data Envelopment Analysis (DEA), the efficiency levels of environmental protection spending in 120 countries have been calculated using regression models to assess the impact of variables such as fossil fuel use, female representation in parliament, and urbanization on the optimization of environmental spending. The results indicate that higher efficiency is associated with high renewable energy consumption and an urban population, while fossil fuel subsidies and high emissions reduce spending efficiency. This analysis provides policymakers with recommendations for reorienting environmental protection spending, promoting sustainable policies that optimize resources and improve ecosystems.