Energy efficiency and energy saving potential in China: An analysis based on slacks-based measure model

This paper analyzes energy efficiency of 30 regions in China mainland for the period of 2000–2009. The slacks-based measure model of data envelopment analysis is for the first time employed to investigate the energy consumption slacks and energy saving potential of each region in China at each year. This approach, with both slacks of inputs and outputs, has a higher discrimination power. Different from the neglect of the environmental effects of undesirable outputs in the existing studies of regional efficiency, this study considers labor, capital stock and energy consumption as inputs, gross domestic product as desirable output, chemical oxygen demand and SO2 as undesirable outputs. The results show that the energy efficiency of the country is improved with the economy development, regions in the east area have the highest efficiency scores, and the west regions has the highest potential industrial energy saving, which is nearly up to 60% of their actual energy consumption.

► The efficiency scores estimated with undesirable outputs are more reasonable.
► The energy efficiency of China is improved with the economy development.
► Regions in the east area of China have the highest efficiency scores.
► China’s west regions have the highest potential industrial energy saving.