Total-Factor Energy Efficiency in China’s Agricultural Sector: Trends, Disparities and Potentials

Zhihai Yang,Tianyi Du,Anlu Zhang,Dong Wang,Yixiao Zhou

doi:10.3390/en11040853

Abstract

This paper investigates total-factor energy efficiency and analyses the trends of the efficiency changes in China’s agricultural production across 30 provinces and three regions from 2001 to 2011, based on data envelopment analysis (DEA) approach. The potential amount of energy savings and five potential factors for energy efficiency improvement are also empirically studied by Tobit regression model. The findings show that (1) total-factor energy efficiency in China’s agricultural sector is increasing over years but performs heterogeneously across regions; (2) agriculture intensive regions and energy abundant provinces tend to be relatively energy inefficient in agricultural production; and (3) economic structure, agricultural production structure, technological progress and income effect are major potentials for improving energy efficiency, whereas energy price is not a significant factor. This phenomenon results from the divergence of economic development, endowment effects as well as the scale of agricultural production. Policy implications drawn from this research are to upgrade industrial structure and promote agricultural transformation to enhance farmers’ income as well as to establish a land market with entitling land property rights to farmers. This conclusion can assist to form more scientific rural energy policy decision-making in China and also can be extended to other developing economies for sustainable agriculture.

Highlights

China is an ancient and grand agricultural economy
It is a general belief that higher energy price could reduce the energy intensity and improve energy efficiency, our finding is reasonable and can be explained when we consider that China’s energy market does not function well [36] and the abundant subsidy for energy consumption exists in the agricultural sector
China’s energy consumption in the agricultural sector is huge in absolute quantity; energy efficiency issues stay at the center of rural energy policy decision-making and should be paid more attention to by economists and policymakers in order to tackle global greenhouse gases (GHG) emission

Summary

Introduction

Energy consumption of agricultural sector has been increasing in recent decades so that the efficiency issue has emerged and attracted attention of economists and policymakers. China produces food for 23% of the world’s population with only 7%. Of the world’s farms, along with agricultural modernization and rapid urbanization [1]. This progress is closely connected with energy consumption in the agricultural sector given that energy is to some degree a foundation and key input of industrialization. As the largest energy consumer and the largest food producer in the world, China recently has launched a national strategy to decrease energy. Concerning the accelerative trend, the central government announced that the agricultural sector will share equal responsibilities in improving energy efficiency with other sectors in the Twelfth National Five-Year Plan (2011–2015) [2]

Methods

Results

Conclusion