Environmental regulations, energy and environment efficiency of China’s metal industries: A provincial panel data analysis

Abstract

Improving the energy and environmental efficiency (EEE) of China’s metal industries is vital for China’s sustainable development. Based on provincial panel data from 2006 to 2016, this study first calculates the unified efficiency index (UEI) and energy-environmental performance index (EEI) of Chinese metal sub-industries. Then, the effects of different types of environmental regulations on the EEE of Chinese metal industries are examined. The results show that the EEE of China’s metal sub-industries was extremely low between 2006 and 2016. The EEE of the ferrous metal smelting and rolling processing industry (S3) was the highest; the EEE of the non-ferrous metal smelting and rolling processing industry (S4) was the lowest. Although the EEE of the metal sub-industries in the central and western regions was lower than in the eastern region during the sample period, it increased faster than in the eastern region, especially after 2012. The regression results show a significant inverted U-shaped relationship between environmental regulations and EEE in the metal industries, indicating that although command-and-control environmental regulation (CER) and market-based environmental regulation (MER) can improve these industries’ EEE in the short term, excessive intensity will backfire. In addition, MER is more effective than CER in improving EEE. Therefore, diversified environmental regulations are needed to promote sustainable development.