HOW URBANIZATION AFFECTS ENERGY-ENVIRONMENT EFFICIENCY: EVIDENCE FROM CHINA

Abstract

Energy consumption and environmental pollution are along with urban sprawling, while the impact of urbanization on energy and environment is quite controversial. The study of urbanization and energy-environmental efficiency provides a new perspective to understand the correlation between urbanization, energy consumption and environment. In this paper, a Directional Distance Function-Data Envelopment Analysis (DDF-DEA) model is employed to investigate provincial energy-environment efficiency in China from 1999 to 2017. Then the mechanism of urbanization substantially affecting the energy-environment efficiency is empirically examined from the perspective of government and market, respectively. The results indicate that China’s energy-environmental efficiency is improving, but regional differences exist and have widened since 2005; the overall impact of urbanization on China’s energy-environment efficiency is negative while the mechanism differs between different regions. Specifically, government-dominated urbanization has promoted energy-environment efficiency in the eastern region, while has a negative impact in the central and western regions; market-led urbanization has a limited positive impact on energy-environment efficiency. These conclusions proved to be robust, and are of great significance for policymakers to take full use of the positive externality of urbanization to promote the energy-environment efficiency and improve the environment.