Environmental performance evaluation of Chinese industrial systems: a network SBM approach

Abstract

In recent years, environmental problems caused by industries in China have drawn increasing attention to both academics and policy makers. This paper assesses the environmental efficiency of Chinese regional industrial systems to come up with some recommendations to policy makers. First, we divided each Chinese regional industrial system into a production process and a pollutant treatment process. Then, we built a scientific input–intermediate–output index system by introducing a new network slacks-based model (NSBM) model. This study is the first to combine NSBM with DEA window analysis to give a dynamic evaluation of the environmental efficiency. This enables us to assess the environmental efficiency of Chinese regional industrial systems considering their internal structure as well as China’s policies concerning resource utilization and environmental protection. Hence, the overall efficiency of each regional industrial system is decomposed into production efficiency and pollutant treatment efficiency. Our empirical results suggest: (1) 66.7% of Chinese regional industrial systems are overall inefficient. 63.3 and of 66.7% Chinese regional industrial systems are inefficient in the production process and the pollutant treatment process, respectively. (2) The efficiency scores for the overall system and both processes are all larger in the eastern area of China than those of the central and western areas. (3) Correlation analysis indicates that SO₂ generation intensity (SGI), solid waste generation intensity, COD discharge intensity, and SO₂ discharge intensity have significantly negative impacts on the overall efficiency. (4) The overall inefficiency is mainly due to inefficiency of the pollutant treatment process for the majority of regional industrial systems. (5) In general, the overall efficiency was trending up from 2004 to 2010, indicating that the substantial efforts China has devoted to protecting the environment have yielded benefits.

Keywords:

• Data envelopment analysis (DEA)
• network SBM model
• environmental performance
• window analysis
• Chinese industrial systems

Acknowledgements

The authors would especially like to thank the Editor and anonymous reviewers. Their comments is valuable for us to improve the quality of this article. This research is supported by the National NaturaI Science Foundation of China under Grants (No. 71271196 and No. 71671172), the Youth Innovation Promotion Association of Chinese Academy of Sciences (CX2040160004), Science Funds for Creative Research Groups of University of Science and Technology of China (No. WK2040160008) and Shandong Province Social Science Planning Project (No. 16DGLJ06).

Notes

Please note this paper has been re-typeset by Taylor & Francis from the manuscript originally provided to the previous publisher.

1. These seven major laws concerning environmental protection are: Environmental Protection Law; Law on Marine Environmental Protection; Law on Water Pollution Prevention and Control; Law on Air Pollution Prevention and Control; Law on Solid Waste Pollution Prevention and Control; Radioactive Pollution Prevention and Control Law; and Environmental Noise Pollution and Prevention Law.

2. They pointed that inconsistence means that the types of intermediates from the system view and sub-system view are different.

3. In our study, the undesirable intermediates refer to the pollutants generated from the production process, and therefore, they could be adjusted freely by industry production.

4. In this paper, we simply set w_P = w_T = 0.5 as the economic development and environmental protection are of equal importance in developing industries in China.