Correcting the uneven burden sharing of emission reduction across provinces in China

- This paper proposes an allocation principle based on efficiency levels.
- The link between energy intensity and efficiency is constructed.
- Efficiency-based allocation can distribute reduction burdens smoothly.
- National emission reduction target can be achieved through efficiency measures.

Although China committed to reduce its energy and emission intensity, the allocation of such national targets in the provincial level is still a political negotiation process and lack of a systematic principle from the perspective of efficiency. This paper proposes an allocation principle based on the efficiency levels. The efficiency levels are estimated by employing a stochastic frontier analysis approach and the links between energy intensity and efficiency are constructed. The results show that energy efficiency change is not the major contributor to energy intensity reduction. Furthermore, this analysis indicates that (i) the efficiency-based allocation can distribute reduction burdens among regions smoothly compared to the intensity-based allocation; and (ii) the national target of emission intensity reduction can be achieved solely through efficiency measures.