Environmental Efficiency Assessment of Heavy Pollution Industry by Data Envelopment Analysis and Malmquist Index Analysis: Empirical Evidence from China

Abstract

Industrial waste discharged by heavy pollution industry is one of the main causes of global environmental degradation. Research on the environmental efficiency of high-polluting industry is necessary to tackle the problem of global environmental pollution. Using panel data of 19 sub-industries in China’s heavy pollution industry from 2001 to 2015, this article employs Data Envelopment Analysis (DEA) and Malmquist index (MI) to measure the environmental efficiency of heavy pollution industry from both the dynamic and static perspectives. The results show that the environmental efficiency of China’s heavy pollution industry maintains an upward trend but did not reach the optimal level. The general trend shows a phased trend of increasing first and then decreasing. Besides, there are inter-industry differences in the environmental efficiency across the examined sub-industries. Based on the research findings, this article proposes a set of corresponding countermeasures to solve the global pollution problem, such as reducing energy inputs and minimizing the volumes of the main categories of emissions in high-polluting industry, as well as improving the production management in the group of high environmental efficiency and strengthening technical capabilities in the group of low environmental efficiency.