Effects of urbanization on energy efficiency in China: New evidence from short run and long run efficiency models

Energy efficiency in China has been the cause for increasing concern for national and local sustainable development due to rapid economic development and large-scale energy consumption. Using panel data of 30 provinces between 1997 and 2016 in China, the measurement of energy efficiency is disentangled, and the effects of urbanization on different types of energy efficiency are explored. First, the measurement of energy efficiency is disentangled, with long-run and short-run efficiencies derived. Results of energy efficiency scores highlight the predominant status of long-run inefficiency is low and that disparate energy efficiency is present between provinces. Second, the effects of urbanization were found to be significantly negative on short-run, long-run and overall energy efficiency. Comparatively, the effect of urbanization on long-run efficiency was shown to have recently grown, implying an urgent call for energy conservation during rapid urbanization. Finally, this study outlines broader implications and suggests policies to improve energy efficiency. Here, application of energy conservation technology, industrial structure upgrading and efficiency information disclosure to urban residents are thought to be smart ways to improve energy efficiency.