Provincial green economic efficiency of China: A non-separable input-output SBM approach

Aiming at the undesirable output (CO2 emission) and non-separable inputs and outputs, we employ a non-separable input/output SBM model to measure China's provincial green economic efficiency during 1995-2012. Empirical results indicate that (i) there are larger interregional differences in green economic efficiencies. The highest efficiency of 0.7339 is recorded at the southern coastal region, followed by those at the eastern coastal and northern coastal regions. The lowest efficiency only reaches 0.3049 at the northwestern region. (ii) Energy and CO2 emission are the key factors for green economic efficiencies. (iii) Different regions have different energy-saving and CO2 emission reduction potentials. The southern coastal region should at least save energy of 4.7 million tons of standard coal. The middle Yellow River, northern coastal and northeast regions should save energy as much as 62, 60, 51 million tons of standard coal. CO2 emission excess in the middle Yellow River region reaches 450 million tons in 2012, while CO2 emission excess in the southern coastal region is only 12 million tons. Finally, we propose some target policies to improve China's regional green economic efficiencies.