Measurement and decomposition of energy-saving and emissions reduction performance in Chinese cities

• We propose an energy-saving and emission reduction (ESER) performance index.
• Inefficient management and technology gap are the two main sources of ESER performance lose.
• The relationship between ESER performance and economic development is U-shaped.
• The heterogeneities of production technologies related to ESER are universal in Chinese cities.
• We propose four combinable strategies for improving ESER performance.

Taking into account the heterogeneity of production technologies across Chinese cities, we adopted a meta-frontier function and a non-radial directional distance function to construct an index that comprehensively evaluates the performance achieved by coupling energy-saving and emissions reduction. We also analyzed the theoretical factors leading to performance loss in energy-saving and emissions reduction. An empirical analysis of 209 Chinese cities suggests the following. First, the energy-saving and emissions reduction performances of Chinese cities are generally low, and the relationship between these variables and the economic development level is U-shaped. The results also suggest that cities place more importance on energy-saving than on emissions reduction. Second, the technology gap and insufficient management are the two primary sources of latent capacity that could contribute to energy-saving and emissions reduction in Chinese cities; insufficient management is the dominant factor in both high-income and lower-middle income cities. Four combinable strategies for energy-saving and emissions reduction are proposed. Third, the heterogeneities of production technologies related to energy-saving and emissions reduction are universal; the technological gap between the current and the best production technologies is seen in the largest of the middle income cities, and the gap is smallest in high-income cities.