Do technical differences lead to a widening gap in China's regional carbon emissions efficiency? Evidence from a combination of LMDI and PDA approach

The growing disparity in China's regional carbon emission efficiency is an easily overlooked but crucial issue in China's transition to carbon neutrality. To better understand drivers of widening gap of regional carbon emission efficiency in China from technological progress, industrial inequality, regional inequality, and management inequality, a novel approach is developed by combining a logarithmic mean divisia index and production theoretical decomposition analysis based on multi-layer frontier. The results indicate (i) Except for Ningxia and Xinjiang, the energy utilization efficiency of the remaining provinces continued to improve during the study period. The fossil energy consumption structure in most provinces gets gradually improved, favoring fossil en-ergy with less carbon emissions. The industrial structure of most provinces has not improved significantly. (ii) Improving overall energy efficiency and technological progress is extremely important for carbon emission reduction. Potential energy intensity effect and energy technology efficiency gap effect are the key factors to restrain the increase of carbon emission intensity. (iii) For economically developed regions (such as Beijing and Guangdong), technological factors, potential energy efficiency and scale have a greater impact, while industries, regions, and management efficiency have a smaller impact, indicating that developed regions are at the frontier of efficiency and are improving production and energy structure. Moreover, there is an efficiency gap between underdeveloped regions (such as Xinjiang and Qinghai) and economic regions. Hence, while improving the production structure and energy consumption structure, the efficiency gap with developed regions should be narrowed.

Automated summary

The growing disparity in China's regional carbon emission efficiency is an overlooked but crucial issue for China's carbon neutrality transition. A novel approach is developed to understand the drivers of this widening gap, including technological progress, industrial inequality, regional inequality, and management inequality. The results indicate that most provinces in China have improved energy utilization efficiency and fossil energy consumption structure, but the industrial structure has not improved significantly. Improving overall energy efficiency and technological progress is vital for carbon emission reduction, and there is an efficiency gap between developed and underdeveloped regions.