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Abstract
With increasing emissions of industrial wastewater and poor control measures, environmental pollution has become a serious issue haunting China’s economic development. Meanwhile, the current pollution management policy system in China is mainly under the supervision of the central government and executed by local governments. Under the current economic growth model of China, the industrial sector remains the dominant segment of our economy, which makes the Total Factor Efficiency (TFE) evaluation and policy analysis of industrial wastewater control decisive factors concerning China’s future economic growth and sustainable development. Based on existing studies of China and abroad, and with the help of a Data Envelope Analysis (DEA) model, this paper used 39 industrial sectors and their input-output data from 2003 to 2014 of China as Decision Making Units to calculate the TFE of wastewater control in different industrial sectors of China. Moreover, we have designed and adopted our own MATLAB programming for optimization solutions of multi-variable constrained nonlinear functions in order to obtain a more accurate estimation of the TFE of wastewater control. Based on our calculation results, this paper further explained the difference in TFE and policy implications across typical industries in China, and offered policy recommendations accordingly.
Highlights
China has achieved remarkable economic growth since the reform and opening-up in 1978.until today, the biggest segment of China’s economy, the industrial segment, still hasn’t evolved out of the traditional extensive growth model
Until today, the biggest segment of China’s economy, the industrial segment, still hasn’t evolved out of the traditional extensive growth model. This growth model featured by “high energy consumption, heavy waste, and heavy pollution” in order to pursue output has resulted in huge amounts of industrial pollution and caused severe damage to the environment during China’s fast industrial development, especially the industrial wastewater [1]
In the language of Economics, industrial pollution is a typical example of a negative externality: the social cost of pollution is higher than the private cost to the polluter, causing market failure due to the externality nature of the problem
Summary
Until today, the biggest segment of China’s economy, the industrial segment, still hasn’t evolved out of the traditional extensive growth model. This growth model featured by “high energy consumption, heavy waste, and heavy pollution” in order to pursue output has resulted in huge amounts of industrial pollution and caused severe damage to the environment during China’s fast industrial development, especially the industrial wastewater [1]. In the language of Economics, industrial pollution is a typical example of a negative externality: the social cost of pollution is higher than the private cost to the polluter, causing market failure due to the externality nature of the problem. The market mechanism cannot incentivize the polluter to voluntarily bear the external costs incurred, which will eventually be absorbed by the public, causing inefficiency in resource allocation and a decrease in the aggregate welfare of society, curbing the sustainable development of a country
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