Sources of the potential CO2 emission reduction in China: A nonparametric metafrontier approach

Taking the underlying technology heterogeneity into account, this paper uses a nonparametric metafrontier approach to estimate the CO2 emission efficiency and the potential emission reduction of China's 30 provinces for the period 2006-2010. The sources of the potential emission reduction are identified as managerial failure and technology gap. The proposed models are estimated using linear programming method. The main findings are as follows. Firstly, the potential CO2 emission reduction is averagely 56.2 million tons for each province, and 1687 million tons for the whole country. Secondly, over half of the potential emission reduction is caused by technology gap. Thirdly, the major contributor to the potential emission reduction varies across different regions, as management inefficiency for the east area and technology gap for the central and west areas.