Incorporating greenhouse gas effects to evaluate energy efficiency in China

Reducing greenhouse gas emissions without hampering economic growth is a significant issue for China. Taking into account environmental sustainability principles, this study analysed the energy efficiency of 30 regions of China for the period 2002–2007. By employing a data envelopment analysis (DEA) approach, this study included undesirable CO₂ and SO₂ outputs and the desirable GDP output in the model. Empirical outcomes demonstrated that the overall average technical efficiency (TE) of China is 0.843, indicating a 15.70% input inefficiency. Among three geographic areas, the east has the highest technical efficiency, with the highest ability to set up clean-burning power plants based on best technology available. Performance in the west is less good because of much inefficient technology. Finally, the study demonstrates detailed management implications of the BCG matrix. The most important contribution of this paper is a detailed demonstration of an energy performance evaluation mechanism for China. The valuable results and insights gained can be equally effectively applied to studies in other developing countries facing the same gaseous emissions.