Carbon emissions reductions and technology gaps in the world's factory, 1990–2012

Abstract

China's manufacturing industries are traditionally energy-intensive sectors and are responsible for over half of the country's total CO2 emissions. In this paper, we propose a global meta-frontier non-radial directional distance function approach to measure the CO2 emissions performance of Chinese manufacturing sectors during the period of 1990–2012. This approach allows us to simultaneously consider technological heterogeneity in manufacturing, non-radial slacks, and undesirable outputs. The global level of environmental technology is incorporated into the efficiency model to improve discriminating power and comparability. The results indicate significant differences in CO2-emissions-reduction performance among five broad groups of Chinese manufacturing industries. The “global technologies/ innovators group” is the most efficient under meta-frontier technologies, with the smallest technology gap. Meanwhile, the “energy-/resource-intensive commodities group” is, on average, the least efficient. Therefore, the Chinese government should implement targeted policies that encourage firms in the global technologies/innovators group to increase market share while supporting those in the energy-/resource-intensive commodities group to upgrade their technologies.