Study on the Environmental Efficiency of the Chinese Cement Industry Based on the Undesirable Output DEA Model

Abstract

In recent decades, China’s cement production has been the highest in the world, but the extensive development model, which has been formed for a long time, has brought serious damage to the natural environment. In order to promote the transformation of the production mode of China’s cement industry, this paper adopts the nonparametric frontier method to analyze the environmental efficiency of China’s cement manufacturing industry using the input–output and pollutant emission data of China’s cement manufacturing industry from 2004 to 2016. The results show that the overall environmental efficiency of China’s cement industry is low, and there is still much room for improvement. Moreover, there are serious imbalances from very low to very high between different regions. Further investigation found that during the study period, strict environmental supervision brought an average compliance cost of CNY 23.41 billion to China’s cement manufacturing industry, but the overall environmental efficiency increased by 23.9 percentage points. Based on these findings, we believe that the focus of environmental supervision of China’s cement manufacturing industry at this stage is to reduce pollution emissions, and force cement enterprises to carry out technological innovation through mandatory emission reduction measures. When formulating policies, the Chinese government needs to explore the best way for environmental supervision between minimizing compliance costs and maximizing efficiency, so as to promote the sustainable development of China’s cement manufacturing industry.