Environmental regulation efficiency analysis by considering regional heterogeneity

Abstract

Facing the increasingly severe environmental problems, Chinese government takes environmental regulation as an important way to reduce carbon dioxide emissions and control pollution. For the role of environmental regulation, many scholars have done a lot of research. However, there are few articles on the efficiency of environmental regulation at the regional level. Regional heterogeneity also brings obstacles to the analysis of environmental regulation efficiency (ERE). We propose the meta-frontier Malmquist-Luenberger (MML) index to analyze China's regional ERE by considering the regional heterogeneity. Empirical results show that the ERE of the whole country and each region increase year by year from 2014 to 2018. From the viewpoint of regional heterogeneity, the eastern region contributes the most to ERE gains, while the midwestern region have a relatively low contribution. The decomposition results of MML index indicate that national ERE gains come mainly from the contribution of BPC. However, the main contributors to the change in the MML index across the period are not unique for the three regions.