Measuring environmental performance of industrial sub-sectors in China: A stochastic metafrontier approach

In this paper, we quantitatively measure the environmental performance and potential capacities of carbon emission mitigation of 39 industrial sectors in China during 2005-2011 by adopting a stochastic metafrontier approach. We also analyze the differences of environmental performance and technology gap ratios (TGRs) across three categorized industrial groups. Cluster analysis of carbon intensity provides the categorized groups. The results show that due to neglect of technology gaps among the categorized groups, the environmental performance measured by a stochastic frontier approach (SFA) is underestimated. Comparison analysis infers that, relative to the metafrontier, the industrial sectors in Group 1 achieve the highest environmental performance and TGRs, while environmental performance and TGRs of industrial sectors in Group 3 is still at a low level for lack of advanced production technology. Industrial sectors also perform significant differences on potential capacities of carbon emission mitigation. We suggest that policies and regulations on industrial technology innovation and control of carbon emissions should be strengthened for eco-efficient and sustainable development.