Abstract
This paper investigates the effect of biased technical change on total factor carbon emissions efficiency in China using provincial panel data from 2001–2014. It evaluates each province’s total factor carbon emissions efficiency by a two-stage super-efficiency Data Envelopment Analysis (DEA) model, and measures technical change bias in the framework of time-varying elasticity production function. Then, the impact of technical change’s capital–energy bias on carbon emissions efficiency is estimated by the fixed-effect panel and dynamic panel model. This study has the following findings: First, China’s total factor carbon emissions efficiency still has a long way to go. Carbon emissions efficiency varies a lot across regions. The eastern area boasts the highest carbon emissions efficiency. Second, China’s current technical change is energy-biased, and the marginal production growth rate presents energy>capital>labor, but the gap between energy and capital is diminishing. Third, technical change’s increasing capital bias helps to improve China’s carbon emissions efficiency substantially. The mechanism behind this is the changing factor substitution elasticity in the industry upgrade process.
Highlights
Since its economic reform, China’s economy has kept up a formidable pace of growth, whereas this rapid development has mainly relied on high energy consumption [1]
The Non-radial Directional Distance Function (NDDF) was used to measure China’s energy and carbon emissions efficiency, and investigated the marketization effects on them [22]. Those Data Envelopment Analysis (DEA) methods are faced with another challenge: they are unable to simultaneously rank multiple Decision-Making Units (DMUs)
For lack of official statistical data of China’s carbon dioxide emissions, it is calculated by applying the method introduced by Intergovernmental Panel on Climate Change (IPCC) in 2006 [47] as CE = ∑ FCEi + CC = ∑ ECi × Ei + Q × F, (18)
Summary
China’s economy has kept up a formidable pace of growth, whereas this rapid development has mainly relied on high energy consumption [1]. Global warming would potentially cause damage in many respects, such as human mortality, agricultural activities, sea level rise, dearth of natural resources like forest and water, and so on [2] In this sense, it is imperative for developing countries like China to seek an effective solution to improve carbon emissions efficiency. Biased technical change and factor substitution are important to decrease energy intensity [7]. Whether biased technical change really improves carbon emissions efficiency and the potential impact’s magnitude both remain unknown, and how factor substitution works under technical change’s impact needs investigation, too. Does biased technical change improve China’s carbon emissions efficiency? The fixed effect panel and dynamic panel models are used to investigate the impact of biased technical change on total factor carbon emissions efficiency. The last section concludes the paper and puts forward some practical policy recommendations
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