Scenario-based energy efficiency and productivity in China: A non-radial directional distance function analysis

- China's regional energy efficiency and productivity in 2005-2010 are evaluated.
- Three production scenarios are considered.
- Non-radial directional distance function with CO2 emissions is employed.
- Technological change is the main driver for China's energy productivity growth.

Improving energy efficiency and productivity is one of the most cost-effective ways for achieving the sustainable development target in China. This paper employs non-radial directional distance function approach to empirically investigate energy efficiency and energy productivity by including CO2 emissions as an undesirable output. Three production scenarios, namely energy conservation (EC), energy conservation and emission reduction (ECER), and energy conservation, emission reduction and economic growth (ECEREG), are specified to assess China's energy efficiency and productivity growth during the period of Eleventh Five-Year Plan. Our empirical results show that there exist substantial differences in China's total-factor energy efficiency and productivity under different scenarios. Under the ECEREG scenario, the national average total-factor energy efficiency score was 0.6306 in 2005-2010, while the national average total-factor energy productivity increased by 0.27% annually during the period. The main driving force for energy productivity growth in China was energy technological change rather than energy efficiency change.