Regional energy intensity reduction potential in China: A non-parametric analysis approach

Abstract

Recently, with increasingly concern on energy and environmental problems, China’s new programs of energy intensity reduction were released in 11th&12th Five-Year-Plan, which results in an urgent need for regional energy intensity reduction potential evaluation. Based upon this recognition, this study mainly focuses on China’s regional energy intensity reduction potential, by employing global data envelopment analysis approach. Moreover, investigating the sources of energy intensity reduction potential change with index decomposition analysis is also one of our targets. The results show that: (1) in the sample period, the energy intensity reduction potential of the western regions is significantly higher than that of central and eastern regions, and the eastern regions have the lowest energy intensity reduction potential. (2) The energy intensity of the eastern regions can be reduced approximately 10–20%, whereas that of the western region can be reduced 30–45%, and that of the whole country can be reduce 25–30% on current basis. (3) According to the sources of energy intensity reduction potential change, it can be found that the energy intensity reduction potential of eastern areas decreased over the sample period. Both the increasing technical efficiency and technical progress contribute to the decline of energy intensity reduction potential. But the western region’s energy intensity reduction potential presents an upward trend during 2000–2011, and the technical regression is the main reason. Therefore, the western regions should pay more attention on optimizing the production technology.