Environmental performance analysis of Chinese industry from a slacks-based perspective

The industry activities produce massive bad by-products, in the form of waste water, waste gas or solid waste, which are the source of environmental issues. The growing concerns over environmental problems make China reconsider the current developing pattern, and partially necessitate the reformation of economic structure. If the environmental consequences from economic structure reformation are subject to empirical testing, it is of vital importance to make some actual measurement for environmental performance. To achieve this goal, this paper proposes a slacks-based environmental efficiency index based on data envelopment analysis (DEA). An empirical application to industry sector of China presents the following findings: (1) approximately two-thirds of the nation’s provinces are inefficient due to excessive resource utilization, insufficient products or considerable quantities of wastes; (2) Spearman test shows that SO2 and solid waste intensity have more impacts on industrial aggregated efficiency than those of electricity and COD intensity do, which implies that waste gas and solid waste should be paid more attention in pollution abatement; (3) the environmental protection activities have yielded the expected benefits, as the aggregated efficiency of regional industry has been on a rising trend during the past decade; (4) the west region of China has been developing quickly in recently years and performs well both in economy and environmental control.