Provincial energy efficiency of China quantified by three-stage data envelopment analysis

Abstract

The current society is confronting with the crisis of fossil energy resources scarcity and environment deterioration caused by the accelerating development of economy in China. Since the improvement of energy efficiency has been deemed as the most effective way to decrease energy consumption and pollutant emissions, energy efficiency evaluation has been attached great importance in policy formulating. This investigation employed three-stage data envelopment analysis model to evaluate China's provincial energy efficiency during 2008–2016 excluding the impacts of exterior environmental factors. The empirical results illustrate that the provincial energy efficiencies in China are significantly affected by economic and energy consumption structure, urbanization process, and technical innovation level. Generally, the exterior environmental values and statistical noises result in the underestimation of China's provincial energy efficiencies. The exclusion of exterior environmental factors has provincial-specific impacts. Additionally, energy efficiency can be disintegrated into scale efficiency and pure energy efficiency, which is mainly dominated by scale efficiency. Based on empirical results, provincial specific strategies can be provided to enhance energy efficiency, such as taking the influences of exterior environmental factors into consideration when formulating policies, optimizing the exterior environment to improve provincial energy efficiency, and pertinently improving scale efficiency or pure energy efficiency according to their categorizations.