Environmental efficiency of industrial sectors in China: An improved weighted SBM model

Abstract Utilizing undesirable outputs, a weighted SBM model was proposed in our study. Weights of undesirable outputs and weights of fossil energy were established, based on energy scarcity and the effect on the environment caused by undesirable outputs respectively. Then the environmental efficiency of industrial sectors in China are assessed with the improved weighted SMB. To eliminate the difference in energy structure and undesirable outputs structure, energy inputs and undesirable outputs were employed as classification indicators. Industrial sectors were classified into four groups. Results of the environmental efficiency assessed by three methods showed that the improved SBM model has stronger discrimination power than the previous SBM. The efficiency score measured by the improved SBM is close to the score measured by the SBM model. However, there is an obvious gap between the CCR and the improved SBM. Finally, it is easy to find key indices that have a great impact on the environmental efficiency with the improved SBM.

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