Evaluating China's regional energy and environmental efficiency by considering three internal parallel industries.

ABSTRACT

With the rapid development of China's economy, high energy consumption and high pollution emission have become serious problems. To solve these problems, many studies have been done to evaluate energy and environmental efficiency, as the results can provide valuable information to improve performance. However, the previous research mainly evaluates China's regional energy and environmental efficiency by considering each region's industry as a whole system, ignoring the internal structure. In reality, each region mainly includes three parallel types of industry primary, secondary, and tertiary. Therefore, this paper provides a parallel data envelopment analysis (DEA) approach to evaluate China's regional energy and environment efficiency by considering these parallel industrial systems. The following findings can be obtained based on the empirical results: (1) the overall energy efficiency of China is low, and the inefficiency of the economic system is mainly sourced from the lower energy and environmental performance of the primary industry and the tertiary industry. (2) the introduction of the environmental variable (CO2) leads to the increase of some backward areas' efficiencies. (3) the energy efficiency of each provincial region is different, and most of them have their own inefficient industries. (4) the total factor productivity of China is declining, mainly because of the decline of technical efficiency.