Energy efficiency and production technology heterogeneity in China: A meta-frontier DEA approach

Abstract

The heterogeneities of production technology among provinces in China cause difficulties for unbiased evaluation of energy efficiency. Using meta-frontier data envelopment analysis (DEA) approach, this paper proposes a new method for measuring energy efficiency by considering the “technology gap” and analyzes it as a discrete source of energy inefficiency. This empirical study has three major findings: Firstly, the energy efficiency and technology gap are significantly different in the east, central and west, and most provinces in the east maintain high energy efficiency and advanced production technology, while energy efficiency in the west is on the contrary. Secondly, both the technology gap and management related to energy utilization are important sources of energy inefficiency in the central and the west provinces, and the effect of the technology gap is more obvious. Finally, though overall energy efficiency in China is not high by relative standards and significant regional difference exists, potential energy-saving strategies have been discovered in recent years.