Measurement and decomposition of environmental efficiency in the power industry based on multi-hierarchy meta-frontier BAM model

Abstract

The improvement of the environmental efficiency in the power industry is crucial in promoting energy conservation and emission reduction to achieve sustainable development. This study constructs a multi-hierarchy meta-frontier BAM model to measure environmental efficiency considering technological and regional heterogeneity. Using this model, we measure and decompose the environmental efficiency of the power industry in 30 Chinese provinces during 2008–2020. The main results are as follows. (1) Beijing and four other provinces have the highest environmental efficiency among the high-technology group, while Jiangsu and Hainan have the highest environmental efficiency among the medium-technology and low-technology groups, respectively. There are significant differences in environmental efficiency among provinces within each technology group. (2) Regional and technical inefficiencies in the high-technology and medium-technology groups are the main factors influencing inefficiency. However, the inefficiency of the low-technology group is 0.36, while technical inefficiency is 0.34. (3) The environmental efficiency of all three technical groups has improved as a result of technological progress. Environmental efficiency improvement is the largest in the high-technology group but only by 1%. This study extends conventional approaches of environmental efficiency assessment and enhances the comprehension of the operation of the power industry in various Chinese provinces. The research outcomes provide insights for formulating more precise and effective strategies towards the sustainable evolution of China's power sector.