Total Factor Energy Efficiency, Carbon Emission Efficiency, and Technology Gap: Evidence from Sub-Industries of Anhui Province in China

Abstract

The phenomena of “large energy consumption, high carbon emission, and serious environmental pollution” are against the goals of “low energy consumption, low emissions” in China’s industrial sector. The key to solving the problem lies in improving total factor energy efficiency (TFEE) and carbon emission efficiency (TFCE). Considering the heterogeneity of different sub-industries, this paper proposes a three-stage global meta-frontier slacks-based measure (GMSBM) method for measuring TFEE and TFCE, as well as the technology gap by combining meta-frontier technology with slacks-based measure (SBM) using data envelopment analysis (DEA). DEA can effectively avoid the situation where the technology gap ratio (TGR) is larger than unity. This paper uses the three-stage method to empirically analyze TFEE and TFCE of Anhui’s 38 industrial sub-industries in China from 2012 to 2016. The main findings are as follows: (1) Anhui’s industrial sector has low TFEE and TFCE, which has great potential for improvement. (2) TFEE and TFCE of light industry are lower than those of heavy industry under group-frontier, while they are higher than those of heavy industry under meta-frontier. There is a big gap in TFEE and TFCE among sub-industries of light industry. Narrowing the gap among different sub-industries of light industry is conducive to the overall improvement in TFEE and TFCE. (3) The TGR of light industry is significantly higher than that of heavy industry, indicating that there are sub-industries with the most advanced energy use and carbon emission technologies in light industry. And there is a bigger carbon-emitting technology gap in heavy industry, so it needs to encourage technology spillover from light industry to heavy industry. (4) The total performance loss of industrial sub-industries in Anhui mainly comes from management inefficiency, so it is necessary to improve management and operational ability. Based on the findings, some policy implications are proposed.