Energy and CO2 emissions performance in China's regional economies: Do market-oriented reforms matter?

【Abstract】This paper employs a newly developed non-radial directional distance function to evaluate China's regional energy and CO2 emission performance for the period 1997–2009. Moreover, we analyze the impact of China's market-oriented reform on China's regional energy and carbon efficiency. The main findings are as follows. First, most of China's regions did not perform efficiently in energy use and CO2 emissions. Provinces in the east area generally performed better than those in the central and west areas.By contrast, provinces in the west area generally evidenced the lowest efficiency. Second, Market-or-iented reforms, especially the promotion of factor market, were found to have positive effect on the efficiency of energy use and CO2 emissions. Third, the share of coal in the total energy consumption and the expansion of the industrial sector were found to be negatively correlated with China's regional energy and CO2 emissions performance. Based on the empirical findings, we provide policy suggestions for enhancing energy and carbon efficiency in China.This paper is supported by the Research Fund of Newhuadu Business School, Ministry of Education Foundation (Funding no.10JZD0018), Basic Research Universities Special Foundation (Funding no.2010221051), Ministry of Education Foundation (Funding no. 10JBG013) and National Social Science Foundation (Funding no.09&ZD050). Kerui Du thanks the financial support of Yinxing Economic Research Fund

Environmental Productivity and Convergence of European Manufacturing Industries. Are they Under Pressure?

European industries are under pressure regarding their environmental performance and productivity growth. The current energy crisis offsets governments efforts to achieve carbon neutrality while removing significant degrees of freedom in terms of firm's competitiveness. This paper studies environmental productivity and its components at a European industrial level using a dataset of 13 industries of the manufacturing sector from 27 European countries over the 1995-2014 period. Our results point out that industrial environmental productivity has deteriorated across Europe with best practice change being the main contributor. In addition, referring to the technological leaders in Europe, the findings point out that low tend to follow the middle-high technology industries. Finally, the non-convergence hypothesis and the creation of discrete clubs for the productivity index case and its components are supported

Essays in Applied Economics

This thesis proposes the application of various economic theories and analytical techniques from the fields of energy economics, environmental economics, comparative economic systems and, development economics in the regional context of South and Central Asia. Applying IV estimation in essay one leads to the conclusion that ethnolinguistic diversity instrumented by diversity of ancient civilizations/empires is strongly linked with contemporary development in Afghanistan. Ethnolinguistic diversity induces higher levels of trust and lower levels of individualism. Moreover, it is associated with higher levels of income and lower levels of violence or crime. A robust regression discontinuity design has been used to estimate the impact of historical ethnolinguistic borders on the contemporary economic development of Afghanistan. Pashtuns have the clear advantage over the other ethnolinguistic groups in Afghanistan in terms of level of income and provision of public goods such as safe drinking water and electricity. The Pashtun belt has suffered more violence and crime due to foreign interference in the Pashtun areas. The ethnolinguistic division in Afghanistan in terms of political preferences is obvious by the fact that support for Ashraf Ghani declines significantly when crossing the ethnic and linguistic border into the non-Pashtun areas. Structural equation modeling results reveal that the empires of Achaemenids, Parthians, and, most prominently, Sasanians, categorized as Old Persian, and the empires of Turkic origin left a positive and persistent impact on the contemporary economic development of Afghanistan. Essay 2 and essay 3 of the dissertation deal with the economics of electricity and sustainable energy. Electricity generation from the use of fossil fuels is one of the largest sources of man-made carbon dioxide emissions in the world. Switching the power industry to the use of renewables such as hydro, solar, and wind energy is an option to deal with the issue of climate change. There are various challenges confronting the world and particularly South Asia in this energy transition towards renewable energy resources. Therefore, there is a necessity to take policy measures that enable electric utilities operating on fossil fuels to reach a technically efficient point where considerable savings in terms of costs and carbon emissions can be made. This has been estimated in the case of Pakistan in essay 2, with a possible reduction of about 34% of carbon emissions and 26% of the cost of power generation from fossil fuels with the use of technically efficient inputs. In essay 3, this thesis explores factors that are impediments to growth of the renewable energy sector by using pooled mean group autoregressive distributed lag (PMG ARDL) and the time series autoregressive distributed lag model, as well as by using the analytical tool of SWOT methodology to identify the strengths, weaknesses, opportunities, and threats in relation to the internal and external environment of development of the renewable energy sector in South Asia. Empirical results suggest that poor economic growth and the depreciating exchange rate are the major barriers to the development of the renewable energy sector of South Asia. SWOT analysis suggests that credit institutions’ lack of interest in financing for renewable energy projects, the poor financial situation of the distribution companies, and inadequate research in the sustainable energy sector are the main obstacles to this development

Carbon emissions in China's thermal electricity and heating industry: An input-output structural decomposition analysis

CO2 emissions from China accounted for 27 per cent of global emisions in 2019. More than one third of China's CO2 emissions come from the thermal electricity and heating sector. Unfortunately, this area has received limited academic attention. This research aims to find the key drivers of CO2 emissions in the thermal electricity and heating sector, as well as investigating how energy policies affect those drivers. We use data from 2007 to 2018 to decompose the drivers of CO2 emissions into four types, namely: energy structure; energy intensity; input-output structure; and the demand for electricity and heating. We find that the demand for electricity and heating is the main driver of the increase in CO2 emissions, and energy intensity has a slight effect on increasing carbon emissions. Improving the input-output structure can significantly help to reduce CO2 emissions, but optimising the energy structure only has a limited influence. This study complements the existing literature and finds that the continuous upgrading of power generation technology is less effective at reducing emissions and needs to be accompanied by the market reform of thermal power prices. Second, this study extends the research on CO2 emissions and enriches the application of the IO-SDA method. In terms of policy implications, we suggest that energy policies should be more flexible and adaptive to the varying socio-economic conditions in different cities and provinces in China. Accelerating the market-oriented reforms with regard to electricity pricing is also important if the benefits of technology upgrading and innovation are to be realised

The Development of Environmental Productivity: the Case of Danish Energy Plants

The Danish “Klima 2020” plan sets an ambitious target for the complete phasing-out of fossil fuels by 2050. The Danish energy sector currently accounts for 40% of national CO 2 emissions. Based on an extended Farrell input distance function that accounts for CO 2 as an undesirable output, we estimate the environmental productivity of individual generator units based on a panel data set for the period 1998 to 2011 that includes virtually all fuel-fired generator units in Denmark. We further decompose total environmental energy conversion productivity into conversion efficiency, best conversion practice ratio, and conversion scale efficiency and use a global Malmquist index to calculate the yearly changes. By applying time series clustering, we can identify high, middle, and low performance groups of generator units in a dynamic setting. Our results indicate that the sectoral productivity only slightly increased over the fourteen years. Furthermore, we find that there is no overall high achiever group, but that the ranking, although time consistent, varies between the different productivity measures. However, we identify steam turbines and combustion engines for combined heat and power production as potential high performers, while combustion engines that only produce electricity are clearly low performers

The governance-production nexus of eco-efficiency in Chinese resource-based cities:A two-stage network DEA approach

For decades, resource-based cities in China have significantly contributed to China's socio-economic development. The heavy resource dependence of resource-based cities inevitably leads to a series of environmental problems. Mitigating environmental impacts in an unthinking manner might be disruptive for economic development. Improving eco-efficiency has been a crucial solution for protecting the environment while mitigating its negative economic impact. However, the method commonly used to evaluate the eco-efficiency – that is, the black-box data envelopment analysis (DEA) – cannot examine the inefficiencies of the internal structure, and as a result, the underlying management defects are unclear. To open the black box, this study presents a two-stage network DEA framework incorporating government and industrial sectors and measures the eco-efficiency of 84 resource-based cities during the post-financial crisis period (2007–2015). The results indicate that the average eco-efficiency of China's resource-based cities shows a promising increase, and there is a positive relationship between governance efficiency and production efficiency. The decreasing trend of governance efficiency in the Central, Western, and Northeast regions after 2014 shows the low quality of the government sector in the usage of fiscal income. Proactive disclosure of how the government sector conducts public business and spends taxpayers' money should be made to increase transparency, attract more entrepreneurial resources to carry out production activities, and further improve sustainability. The two-stage network DEA framework helps obtain more insights into the internal management defects of the government and industrial sectors and enhance their cooperation to improve the eco-efficiency precisely

Comparisons of CO₂ emission performance between secondary and service industries in Yangtze River Delta cities

To put the brakes on global climate change, China, the world's top emitter, has established ambitious CO2 emissions reduction targets. Industry-level emissions analysis can help policymakers determine better ways to achieve mitigation targets. This study is the first to target the total-factor carbon emission performance (TCPI) of secondary and service industries. We first compile industry-level CO2 emission inventories of 25 Yangtze River Delta cities during 2007–2016. The TCPI of secondary and service industries is then estimated by the non-radial directional distance function. We then compare the TCPI of the two industries across levels, dynamics, and inequalities using a global metafrontier approach. The results show the TCPI of the service industry (0.563 in 2016) was significantly higher than that of secondary industry (0.256 in 2016), suggesting that the service industry was more carbon-friendly. The TCPI gap between the secondary and service industries narrowed over the study period. The TCPI of secondary industry showed a promising increase during 2007–2016 with an annual growth rate of 2.30%, reflecting the positive effects of the government's reforms and environmental regulations. By contrast, the service industry saw a downward trend in TCPI, decreasing by 1.68% annually, primarily because it is a newcomer to low-carbon development. TCPI inequality in secondary industry was much larger than in the service industry, suggesting that significant heterogeneity exists in secondary industry. Therefore, policymakers should implement targeted mitigation policies for secondary industry, and place decarbonising the service industry on the agenda to reverse its decreasing TCPI