Efficiency and abatement costs of energy-related CO2 emissions in China: A slacks-based efficiency measure

This paper uses nonparametric efficiency analysis technique to estimate the energy efficiency, potential emission reductions and marginal abatement costs of energy-related CO2 emissions in China. We employ a non-radial slacks-based data envelopment analysis (DEA) model for estimating the potential reductions and efficiency of CO2 emissions for China. The dual model of the slacks-based DEA model is then used to estimate the marginal abatement costs of CO2 emissions. An empirical study based on China’s panel data (2001–2010) is carried out and some policy implications are also discussed.

► We employ a slacks-based DEA model to estimate the energy efficiency and shadow prices of CO2 emissions in China.
► The empirical study shows that China was not performing CO2-efficiently.
► The average of estimated shadow prices of CO2 emissions is about $7.2.