City-level green growth accounting: Evidence from China's thirteen urban agglomerations

Abstract

Cities play a pivotal role in achieving 'Carbon Peak' and 'Carbon Neutrality' objectives through the implementation of strategies aimed at mitigating environmental risks. While the environmental impacts of industrial production activities have been widely examined, the nuances of their internal structures remain obscure. This study delves into the industrial sector across the 'thirteen urban agglomerations (TUAs)' in mainland China, covering the years 2006–2016, by developing a comprehensive (source-specific and variable-specific) decomposition framework for Malmquist productivity index. The framework is utilized to discern whether efficiency changes or technological advancements drive productivity growth, considering input/output variables such as capital and labor. Findings show that the average annual environmental productivity gain during the examined period was 2.6 %, suggesting a general enhancement in productivity within TUAs' industrial sectors. A detailed breakdown of productivity changes indicates that a combined contribution of 1.8 % to environmental productivity growth stemmed from energy use and pollutant variables, with emissions of industrial sulfur dioxide being the most significant at 0.9 %. Conversely, the 'catch-up effect,' or environmental efficiency change, was negative (−0.2 %), indicating the TUAs' inability to emulate the productivity levels of more advanced areas. Industrial energy use and capital inputs were the primary contributors to this negative trend, each accounting for a −0.2 % impact. The results underscore the importance of facilitating technology transfers from more developed to less advanced regions, especially regarding renewable energy and capital investment, to bolster environmental performance and productivity in the TUAs' industrial sectors.