Abstract
Low energy efficiency and severe environmental pollution are two growing issues haunting China’s fast economic development. Under China’s current development model, economic growth still heavily depends on massive energy input, which makes energy efficiency one crucial topic in order to secure future sustainable development of China. This paper focuses on the unique energy ownership structure of China, and designs and adopts MATLAB programming for optimization solutions of multi-variable constrained nonlinear functions to obtain results that can better reflect China’s energy efficiency and solutions to sustainable development of China. Using this model, this paper conducts an empirical analysis on the impact of difference energy investment behaviors between China’s state-owned entities and non-state-owned business on China’s Total Factor Energy Efficiency (TFEE) and sustainable development from 2003 to 2014. We find that Beijing and Shanghai represent the highest energy efficiency level in China. However, except for the more developed regions in Eastern China, for other provinces in Northeast China, Central China and Western China, the TFEE of energy investment by state-owned and non-state-owned economies are both quite low compared with the optimal level. Based on the above findings from the empirical study and detailed analysis by region, this paper discusses the possible reasons for China’s low TFEE and provides implications and policy recommendations.
Highlights
Since the reform and opening-up in 1978, China has kept a proud and rapid economic growth for almost 40 years, with marvelous GDP increase
Because the calculation of the Data Envelope Analysis” (DEA) Model based on input and output data of Decision Making Units (DMU) does not require detailed assumptions or constraints on the production function, this model can be widely used in estimation of energy efficiency
Because this paper focuses on the different impacts from entities with different ownership structures on energy investment, including the factor of fiscal income as an output factor into our model is very important
Summary
Since the reform and opening-up in 1978, China has kept a proud and rapid economic growth for almost 40 years, with marvelous GDP increase. Behind this fast economic growth is the extensive economic growth model with heavy investment and energy input. The dependence on fossil energy has resulted in an expanding heavy chemical industry and energy sector. In the 21st Century, due to the over-dependence on energy consumption and such priority setting of “Economic Development over Environmental Protection” by many local officials in China, the environmental issues in China have become increasingly striking, threatening people’s quality of life and the sustainability of China’s economic development. According to the published statistics by National Bureau of Statistics of China, the investment on environmental pollution control by China in 2015 alone has reached 1.29% of the total GDP of that year (Figure 1) [1].
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