Coal, oil, or clean energy: Which contributes most to the low energy efficiency in China?

Abstract

The lack of energy efficiency in China is always of interest. This paper builds a total-factor energy efficiency framework which contains coal energy, oil energy, and clean energy, which emits fewer pollutants into the atmosphere when used. We study the “China Statistical Yearbook” and the “China Energy Statistical Yearbook” to identify which type of energy contributes most to low energy efficiency in China. Our conclusion is that the total-factor energy efficiency (TFEE) in China has been at a relatively low level without any significant improvement from 1998 to 2010. The efficiencies of coal and oil energy have improved moderately, while there is no obvious improvement in the efficiency of clean energy. Despite the moderately improved efficiency of coal energy, its relatively low level contributes most to the overall energy inefficiency because it is the main fuel used in China. Further, the lack of improvements in the efficiency of clean energy makes it another area of policy interest.