Does the Central Government’s Environmental Policy Work? Evidence from the Provincial-Level Environment Efficiency in China

Abstract

This paper aims at checking the effectiveness of environmental policy pushed by the Central Government at provincial level since China's entry into the World Trade Organization (WTO). For this purpose, the industrial system of each province is divided into industrial production sub-system and pollution treatment sub-system, and a novel slack-based measure data envelopment analysis (SBM-DEA) model with non-cooperative game is proposed to evaluate the environment efficiency of both industrial production sub-system and pollutant treatment sub-system. The results show that the proposed model can describe the environmental efficiency more precisely than the traditional DEA models. During 2003-2012, the efficiencies of industrial production sub-system and pollution treatment sub-system at the provincial level are both relatively low. Specifically, the efficiency of industrial production is not only lower than pollution treatment efficiency, but is falling generally, especially in the Eastern area. However, in the Central and Western area, the efficiency of industrial production remains relatively stable, and pollution treatment efficiency is rising steadily. The technology gap between the Central/Western area and the Eastern area is narrowing, particularly concerning pollution treatment technology. We thus conclude that though the Central Government's environmental policies fail to solve the inner contradiction between economic and environmental systems, and they indirectly contribute to the expansion of pollutant treatment technology among the Eastern, Central, and Western areas, which is conducive to the coordinated development among different areas.

A Review of Low-Carbon Transformation and Energy Innovation Issues in China

“…Most papers in this special issue show great interest in the effectiveness of environmental policy [1,2] and pollution emissions [3,4,6,7]. Some of these studies use a conventional regression method to analyze the impacts of green transport policy [2] and low-carbon innovation [3], but the downside of this method is that conventional regressions cannot test and analyze the efficiency of inter-regional industrial systems, or specifically to identify the reasons for the ineffectiveness of a particular industrial system.…”

“…However, the traditional DEA models are still limited to the radial method, in which all input variables can only be contracted proportionally or all output variables can only be expanded proportionally. In this case, a novel slack-based measure data envelopment analysis (SBM-DEA) model with a non-cooperative game was proposed to evaluate the environment efficiency of both industrial production and pollutant treatment sub-systems [1]. Further, input-output analysis is also an effective approach for calculating CO 2 emissions from China's OFDI because the input-output model with non-competitive imports represents monetary transactions between supply chains in mathematical form, and the input-output model can incorporate either the competitive or the non-competitive imports assumption [4].…”

“…Along with rapid economic growth, environmental issues have become increasingly serious due to excessive energy usage and carbon emissions [1]. To enhance environmental performance, low-carbon transformation and energy innovation in energy economics and management are attracting increasing attention from both scholars and policymakers.…”

“…One study presented in this issue takes industrial development as an example. It first introduces a non-cooperative game to characterize the leader-follower relationship between the industrial production sub-system and pollution treatment sub-system in each province, and then proposes a novel two-stage SBM-DEA model to evaluate the provincial efficiency of both industrial production and pollutant treatment with the data from 2003-2012, based on which the effectiveness of the environmental protection policies of the central government is assessed [1]. Results show that the proposed novel two-stage SBM-DEA model can describe the environmental efficiency more precisely than traditional DEA models.…”

“…However, in the central and western areas, the efficiency of industrial production remains relatively stable, and the pollution treatment efficiency is rising steadily. The technology gap between the central/western areas and the eastern area is narrowing, particularly in pollution treatment technology [1].…”