Abstract
A metafrontier slack-based efficiency measure is presented to measure environmental efficiency for various regions in China. The objective of the new approach is to investigate the change of environmental efficiency while incorporating group heterogeneities and all variable slack and environmental pollutants into environmental efficiency analysis. Global production technology is used to improve the discriminating power of environmental efficiency measurement. An empirical analysis of regional environmental efficiency is carried out incorporating sulfur dioxide emissions and the chemical oxygen demand (COD) of China’s regions from 2000–2011. Results indicate that excessive emissions pollution is the major cause of environmental inefficiency. Most of the regions return environmental efficiency values. Significant regional technology gaps in environmental efficiency are found between the east, central, and west areas. Finally, some policy implications are presented from the empirical results.
Highlights
Since the reform and opening-up policy, China’s economy has maintained rapid growth, but progress is based on the consumption of resources and environmental pollution
Using the slack-based measure (SBM) approach can improve the accuracy of environmental efficiency measurement
We propose a new approach by combining the concept of metafrontier environmental technology and the SBM method; we refer to this as the metafrontier SBM model (MSBM)
Summary
Since the reform and opening-up policy, China’s economy has maintained rapid growth, but progress is based on the consumption of resources and environmental pollution. Extensive economic growth reduces the potential of economic sustainability, so improving the environmental efficiency of regions is an inevitable requirement for sustainable development. The cost of ecological environmental degradation and ecological destruction in 2010 was about 1538 billion Yuan, 3.5% percentage of GDP [1]. This impact reflects the fact that rapid industrialization has caused severe environmental problems. Most provinces are facing these serious environmental problems. The extensive mode of economic development, irrational industrial structure, and irrational energy structure will cause even greater environmental pollution
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