A performance evaluation of the energy, environmental, and economic efficiency and productivity in China: An application of global data envelopment analysis

The current mode of economic development in China is typified by high growth, high energy consumption, and high pollution characteristics and this has caused great stress on both energy consumption and the environment. This paper focuses on a historical analysis of China’s energy, environmental, and economic (‘E3’) efficiency and the sources of E3 productivity growth therein. A developed slacks-based measure is utilized to evaluate the performance of E3 efficiency and decompose the performance fluctuations into three components: energy, economy, and environmental efficiency fluctuations. By applying a method based on global data envelopment analysis, we also analyze the key factors responsible for the change in E3 productivity during 2002–11 from the point of view of technical progress, production scale, and management level. The results show that China performs well on the economic front, while the energy and environmental performances are not optimistic. Fortunately, energy and environmental efficiency have gradually improved in recent years. Further analysis shows that the trend in E3 productivity in China has begun to follow an ascending path. Technical progress is the most powerful contributor to China’s E3 productivity growth, while falling scale and management efficiency are the two main obstacles preventing improvement in E3 productivity.

[1]  Ning Zhang,et al.  Energy efficiency, CO2 emission performance and technology gaps in fossil fuel electricity generation in Korea: A meta-frontier non-radial directional distance functionanalysis , 2013 .

[2]  Katsuya Tanaka,et al.  Efficiency analysis of Chinese industry : A directional distance function approach , 2007 .

[3]  Peng Zhou,et al.  A survey of data envelopment analysis in energy and environmental studies , 2008, Eur. J. Oper. Res..

[4]  Rolf Färe,et al.  Productivity and Undesirable Outputs: A Directional Distance Function Approach , 1995 .

[5]  Yi-Ming Wei,et al.  An empirical analysis of energy efficiency in China's iron and steel sector , 2007 .

[6]  Chunhua Wang,et al.  Decomposing energy productivity change: A distance function approach , 2007 .

[7]  Rolf Färe,et al.  Directional distance functions and slacks-based measures of efficiency , 2010, Eur. J. Oper. Res..

[8]  Allen V. Kneese,et al.  The Economics of Environmental Policy , 1973 .

[9]  Ke Wang,et al.  A comparative analysis of China’s regional energy and emission performance: Which is the better way to deal with undesirable outputs? , 2012 .

[10]  C. Lovell,et al.  Econometric Estimation of Technical and Environmental Efficiency: An Application to Dutch Dairy Farms , 1999 .

[11]  Dequn Zhou,et al.  Industrial energy efficiency with CO2 emissions in China: A nonparametric analysis , 2012 .

[12]  John S. Liu,et al.  A survey of DEA applications , 2013 .

[13]  Ning Zhang,et al.  Quantitative Ecological Risk Analysis by Evaluating China's Eco-Efficiency and Its Determinants , 2013 .

[14]  Abdul Jalil,et al.  The impact of growth, energy and financial development on the environment in China: A cointegration analysis , 2011 .

[15]  Zhicheng Liang,et al.  Financial Development, Economic Efficiency and Productivity Growth: Evidence from China , 2006 .

[16]  Nadia S. Ouédraogo,et al.  Energy consumption and economic growth: Evidence from the economic community of West African States (ECOWAS) , 2013 .

[17]  Philippe Vanden Eeckaut,et al.  Non-parametric efficiency, progress and regress measures for panel data: Methodological aspects☆ , 1995 .

[18]  Yi-Ming Wei,et al.  Regional total factor energy efficiency: An empirical analysis of industrial sector in China , 2012 .

[19]  Manhong Shen,et al.  Empirical Analysis of Provincial Energy Efficiency in China , 2009 .

[20]  Satoshi Honma,et al.  Total-factor energy productivity growth of regions in Japan , 2009 .

[21]  Jin-Li Hu,et al.  Total-factor energy efficiency of regions in China , 2006 .

[22]  R. Shepherd.  Theory of cost and production functions , 1970 .

[23]  Hui Wang,et al.  Energy and CO2 emission performance in electricity generation: A non-radial directional distance function approach , 2012, Eur. J. Oper. Res..

[24]  P. Zhou,et al.  Efficiency and abatement costs of energy-related CO2 emissions in China: A slacks-based efficiency measure , 2012 .

[25]  James E. Payne,et al.  The causal relationship between U.S. energy consumption and real output: A disaggregated analysis , 2009 .

[26]  Xiaolong Xue,et al.  Measuring the Productivity of the Construction Industry in China by Using DEA-Based Malmquist Productivity Indices , 2008 .

[27]  S. Malmquist.  Index numbers and indifference surfaces , 1953 .

[28]  A. Hailu,et al.  Non‐Parametric Productivity Analysis with Undesirable Outputs: An Application to the Canadian Pulp and Paper Industry , 2001 .

[29]  Han Shengjuan,et al.  Research on the Dynamic Relationship of the Energy-Economy-Environment (3E) System-Based on an Empirical Analysis of China , 2011 .

[30]  Jin-Li Hu,et al.  Total-factor energy efficiency of regions in Japan , 2008 .

[31]  Yi-Ming Wei,et al.  Energy and emissions efficiency patterns of Chinese regions: A multi-directional efficiency analysis , 2013 .

[32]  Abraham Charnes,et al.  Measuring the efficiency of decision making units , 1978 .

[33]  Gary Koop,et al.  Carbon dioxide emissions and economic growth: A structural approach , 1998 .

[34]  Stefan Schaltegger,et al.  The link between 'green' and economic success: environmental management as the crucial trigger between environmental and economic performance. , 2002, Journal of environmental management.

[35]  Finn R. Førsund,et al.  Malmquist Indices of Productivity Growth during the Deregulation of Norwegian Banking, 1980-89 , 1992 .

[36]  Zongguo Wen,et al.  Evaluating China's urban environmental sustainability with Data Envelopment Analysis , 2010 .

[37]  Ming-Miin Yu,et al.  Total factor productivity growth in China's agricultural sector , 2008 .

[38]  Rolf Färe,et al.  Nonparametric Productivity Analysis with Undesirable Outputs: Comment , 2003 .

[39]  Dequn Zhou,et al.  Scenario-based energy efficiency and productivity in China: A non-radial directional distance function analysis , 2013 .

[40]  D. Luenberger.  Benefit functions and duality , 1992 .

[41]  William L. Weber,et al.  A directional slacks-based measure of technical inefficiency , 2009 .

[42]  Lei Zhu,et al.  Evaluation of potential reductions in carbon emissions in Chinese provinces based on environmental DEA , 2011 .

[43]  Dong-hyun Oh,et al.  A global Malmquist-Luenberger productivity index , 2010 .

[44]  Li Li,et al.  Evaluating the relationships among economic growth, energy consumption, air emissions and air environmental protection investment in China , 2013 .

[45]  James R. Thornton,et al.  Environmental divergence: Air pollution in the USSR , 1974 .

[46]  Jun Bi,et al.  Chinese regional industrial energy efficiency evaluation based on a DEA model of fixing non-energy inputs , 2010 .

[47]  Harald Dyckhoff,et al.  Measuring ecological efficiency with data envelopment analysis (DEA) , 2001, Eur. J. Oper. Res..

[48]  Stijn Reinhard,et al.  Investigating technical efficiency and potential technological change in Dutch pig farming , 2004 .

[49]  Aihua Wu,et al.  Energy efficiency evaluation for regions in China: an application of DEA and Malmquist indices , 2014 .

[50]  Atakelty Hailu,et al.  Environmentally Sensitive Productivity Analysis of the Canadian Pulp and Paper Industry, 1959-1994: An Input Distance Function Approach , 2000 .

[51]  Hans Bressers,et al.  Productivity growth and environmental regulations - accounting for undesirable outputs: Analysis of China's thirty provincial regions using the Malmquist–Luenberger index , 2011 .

[52]  L. Liang,et al.  Energy Efficiency and Productivity of China: Compared with Other Countries , 2007, International Conference on Computational Science.

[53]  James B. Ang,et al.  Economic development, pollutant emissions and energy consumption in Malaysia , 2008 .

[54]  Bin Chen,et al.  Temporal and Spatial Analysis of Integrated Energy and Environment Efficiency in China Based on a Green GDP Index , 2011 .

[55]  Jinghai Zheng,et al.  An Empirical Analysis of Provincial Productivity in China (1979–2001) , 2006 .

[56]  Almas Heshmati,et al.  A sequential Malmquist-Luenberger productivity index : Environmentally sensitive productivity growth considering the progressive nature of technology , 2010 .

[57]  Kaoru Tone,et al.  A slacks-based measure of super-efficiency in data envelopment analysis , 2001, Eur. J. Oper. Res..

[58]  Finn R. Førsund,et al.  Good Modelling of Bad Outputs: Pollution and Multiple-Output Production , 2009 .

[59]  James R. Thornton,et al.  On the environmental efficiency of economic systems , 1978 .

[60]  Feng He,et al.  Energy efficiency and productivity change of China’s iron and steel industry: Accounting for undesirable outputs , 2013 .

[61]  Li Yang,et al.  Regional differences of environmental efficiency of China's energy utilization and environmental regulation cost based on provincial panel data and DEA method , 2013, Math. Comput. Model..

[62]  R. Färe,et al.  Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries , 1994 .