Analysis of CO2 emission performance of China’s thermal power industry: a meta-frontier Malmquist-Luenberger approach with fixed-sum CO2 emissions

Abstract

This study combines the general equilibrium efficient frontier data envelopment analysis (GEEFDEA) approach, which handles fixed-sum CO2 emissions, with the meta-frontier Malmquist-Luenberger productivity index (MMLPI). We use this novel technique to measure the CO2 emission performance (CEP) of 30 of China’s provincial-level thermal power industries during 2006–2020, both statically and dynamically, and reveal the drivers of CEP changes. Our proposed approach considers the fixed-sum feature of CO2 emissions and also captures the impact of technology heterogeneity. The empirical results show that the CEP of China’s thermal power industry was good during the sample period, showing average annual increases of 2.42%, mainly due to technical efficiency gains and technological progress. The CEP of most provinces grew at various rates, between 0.23% and 8.38%; and the drivers of CEP changes differ between provinces. Policy implications are discussed, such as the need to strengthen technology innovation and optimize production processes to improve CEP.