Abstract
This paper estimates China’s water utilization efficiency using the directional distance function to take into account the environmental degradation affecting the economy. We further analyze the spatial correlation and the factors influencing the utilization efficiency using spatial panel data models. The results show that water utilization efficiency in China differs between provinces and regions. For example, water utilization efficiency in the eastern coastal provinces is significantly higher than that of inland provinces. The pattern of spatial auto-correlation Moran’s I index presents significant spatial auto-correlation and evident cluster tendencies in China’s inter-provincial water utilization. Factors that contribute to water utilization efficiency include economic development, technological progress, and economic openness. Negative factors affecting water utilization efficiency arise from industrial structure, government interference, and water resources endowment. In addition, the price of water resources is insignificant. The improvement of water utilization efficiency is essential to sustainable economic development. To raise the utilization efficiency of water resources, China should focus on transforming its industrial restructure, advancing technological development, enhancing economic openness, and encouraging entrepreneurial innovations. Moreover, establishing a mechanism to encourage water conservation and reduce wastewater pollution will further increase water utilization efficiency.
Highlights
Resources utilization efficiency means using fewer resources to produce the same amount of goods and services, or using a given amount of resources to produce more output or better quality of life [1]
This paper examines the impact on utilization efficiency of the following variables: economic growth (EG), industrial structure (IS), technological progress (TP), economic openness (EO), water resources endowment (WE), water resources price (WP), and government influence (GI)
Our results show higher water utilization efficiency for the western region compared to the central region
Summary
Resources utilization efficiency means using fewer resources to produce the same amount of goods and services, or using a given amount of resources to produce more output or better quality of life [1]. We estimate water utilization efficiency in China taking the environmental degradation of water utilization into consideration. This means minimizing the water input given a certain level of “green output” (economic output subtracting environmental damages). There are two major water resources problems in China: water resource shortages and water ecological degradation. According to China Water Resources Bulletin, in 2010, the country’s sewage discharge is 792 ˆ 108 t, a 36% increase from 1997—a phenomenon seemingly contradicting the water shortage problem. This paper estimates China’s water utilization efficiency using the directional distance function with eco-environmental considerations. This paper seeks to provide a theoretical support for sustainable utilization of water resources in China
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