Measurement and decomposition of industrial green total factor water efficiency in China

Abstract

The green efficiency of water resources is important for industrial cleaner production and sustainable development. Existing studies pay much attention to the economic efficiency of water resource utilisation, ignoring its green efficiency. In order to solve this problem, an index of green total factor water efficiency (GTFWE) that can reflect the economic efficiency and green efficiency of water resources is constructed based on the DEA-SBM model with undesirable output. In addition, GTFWE is comprised of green total factor water management efficiency (GTFWME) and green total factor water environmental efficiency (GTFWEE) using the four-stage DEA model. The empirical results show that GTFWE in China’s industry is at a low level, the effect of GTFWEE on GTFWE is generally increasing, and GTFWME is decreasing. However, there are large differences in these trends between regions and provinces in China. The GTFWME of Beijing, Tianjin, and seven other provinces needs improvement, while the GTFWME and GTFWEE of Hebei, Inner Mongolia, and other 15 provinces is low and also need improving. In contrast, both GTFWME and GTFWEE are high in the Shandong and Guangdong provinces. This paper provides a method for assessing GTFWE in China’s industry and proposes some important policy implications for promoting the efficiency of China’s industrial green total factor water resources.