Evaluation of Energy Use and Environmental Efficiency in China’s Industrial Sector: A statistical analysis by province based on the SBM model

TU Zhengge1 and LIU Leike2  1

1 School of Economics and Management, Central China Normal University, China
2 Development Research Center, Wuhan Economic and Technology Development Zone

Abstract: The world today is faced with the critical challenge of developing industries for both high technological efficiency and possibly less impact on resources and the environment. This paper employs the Slacks-based measure (SBM) to conduct an empirical analysis of China’s industrial environmental efficiency between 1998 and 2008. We found a slight decline in SBM nationwide due to the combined effects of resource/environmental constraint as well as technological progress. From a static perspective, there is a clear disparity in coordination among regions, particularly between western regions and eastern coastal regions. From a dynamic perspective, there is limited change in the coordination of industries with natural resources and the environment in coastal and central regions, but a marked decline in the northeast and western regions. This contrast can be traced to the following reasons: the capital-intensive structure of the economy and the high proportion of large industrial enterprises that restrict the improvement of SBM environmental efficiency.

Higher living standards, indigenous innovation, acquisition of new technologies, and foreign direct investment will be conducive to industries’ synchronous development with natural resources and the environment.

Key word: data envelope analysi, SBM environmental efficiency, resource-efficient and environment-friendly society

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