CO2 emissions performance and reduction potential in China’s manufacturing industry: A multi-hierarchy meta-frontier approach

Abstract

Excessive CO2 emissions from manufacturing has become a major factor that constrains China’s sustainable economic development. Therefore, considering the regional and industrial heterogeneities, this paper introduces a global multi-hierarchy meta-frontier Data Envelopment Analysis approach to analyze the dynamic performance of CO2 emissions and to estimate the current CO2 emissions inefficiency and reduction potential in the manufacturing industry of China’s 30 provinces, which are separated into three components, namely, structural characteristics, technology gaps, and resource allocation levels. The results show that: (1) From 2003 to 2015, the CO2 emissions efficiency of China’s manufacturing industry increased by a factor of 4.7, of which technological progress and optimization of industrial structure were the main driving forces. (2) At present, the CO2 emissions inefficiency of the manufacturing industry in mainland China is 0.7804, reflecting that 78.04% of its total CO2 emissions is excessive emissions, which is mainly caused by the low allocation efficiency. (3) The heavy sub-industry and the east region have the greatest potential for CO2 emissions reduction in the manufacturing and in the three regions of the country, respectively. In addition, by promoting the industrial restructuring, regional coordinated development, and strengthening the environmental regulations and promoting market-oriented reforms, China’s manufacturing industry could reduce 29.65%, 11.55% and 36.84%, respectively, of its current CO2 emissions. Based on the estimation results, this paper also points out the short-term and long-term directions for industrial structure adjustment and develops the specific paths for China’s 30 provinces to achieve CO2 emissions reduction in manufacturing industry.