Analysis of low-carbon economy efficiency of chinese industrial sectors based on a RAM model with undesirable outputs

Abstract

Industrial energy and environment efficiency evaluation become especially crucial as industrial sectors play a key role in CO2 emission reduction and energy consumption. This study adopts the additive range-adjusted measure data envelope analysis (RAM-DEA) model to estimate the low-carbon economy efficiency of Chinese industrial sectors in 2001-2013. In addition, the CO2 emission intensity mitigation target for each industrial sector is assigned. Results show that, first, most sectors are not completely efficient, but they have experienced and have improved greatly during the period. These sectors can be divided into four categories, namely, mining, light, heavy, and electricity, gas, and water supply industries. The efficiency is diverse among the four industrial categories. The average efficiency of the light industry is the highest among the industries, followed by those of the mining and the electricity, gas, and water supply industries, and that of the heavy industry is the lowest. Second, the electricity, gas, and water supply industry shows the biggest potential for CO2 emission reduction, thus containing most of the sectors with large CO2 emission intensity mitigation targets (more than 45%), followed by the mining and the light industries. Therefore, the Chinese government should formulate diverse and flexible policy implementations according to the actual situation of the different sectors. Specifically, the sectors with low efficiency should be provided with additional policy support (such as technology and finance aids) to improve their industrial efficiency, whereas the electricity, gas, and water supply industry should maximize CO2 emission reduction.