Analyzing the sustainability of China’s industrial sectors: A data-driven approach with total energy consumption constraint

Abstract

Tight energy constraints and severe environmental pollution are two main problems affecting economic growth and sustainable development. As an important economic growth mode, green growth seeks to achieve both economic growth and environmental sustainability. Previous studies on the efficiency evaluation of green growth ignored fixed-sum energy consumption; this is a significant omission because this constraint is general in China: the government has set targets to reduce energy consumption by 20% and 16% per unit of GDP during its the eleventh (2006-2010) and twelfth (2011-2015) five-year plans. To fill this gap, we propose a new data envelopment analysis (DEA) model to analyze the green growth degree of China’s industrial sectors. The proposed DEA model considers the constraint of total energy consumption in order to conform to the policy of energy and emission reduction. Previous theoretical studies on fixed-sum output construct the common equilibrium efficient frontier (CEEF) only by considering the minimal reduction strategy for the fixed-sum output of all decision making units (DMUs), while ignoring each DMU’s adjustment strategy for fixed-sum input/output. In this paper, we construct a new CEEF by considering each industrial sector’s adjustment of energy consumption. The new CEEF not only guides the industrial sectors to alter their energy consumption structure to achieve green growth but also allows a more accurate evaluation of the energy and environmental efficiency (EEE) of industrial sectors. Last, our proposed model is applied to analyze the green growth and EEE of 36 of China’s industrial sectors.