Has Environmental Energy Efficiency in China Improved during the First Two Decades of the 21st Century? A New Perspective

Abstract

To estimate the performance of China in terms of energy use efficiency while taking pollutant emission into consideration during the first two decades of the 21st, this study collects a panel data set covering 30 provincial administrative regions in mainland China over the period 2000-2016. To overcome the problem of DEA-based method, by using Bayesian technique this study puts forward a SFA-based model that may estimate environmental energy efficiency while maintaining the regularity constraints imposed on undesirable output. Our empirical results show that the average value of environmental energy efficiency during the whole sample period changes from 0.7858 in 2000 to 0.7726 in 2016, with an average value of 0.7812. This result is in sharp contrast with the often used indexes such as GDP/energy ratio and GDP/undsirable-output ratio, both of which show obvious improvement trendency during the same perid. This study suggests that more sophisticated indexes should be used in evaluating energy efficiency and environment protection related performance.

Keywords: environmental energy efficiency, SFA, DEA, Bayesian technique