Regional energy efficiency and its determinants in China during 2001-2010: a slacks-based measure and spatial econometric analysis

Carbon dioxide (CO2) emissions are largely driven by fossil fuels. To reduce CO2 emissions in China, it is important to determine influential factors of energy efficiency. This paper introduces a slacks-based measure window analysis approach to evaluate regional dynamic energy efficiency during 2001-2010, and then explores energy efficiency determinants by considering spatial effects, which is conducted based on spatial econometric models. The empirical results show that there exist evident spatial correlations between regional energy efficiencies in China. We find that, there exist evident disparities in cumulative effects of energy efficiency among the eastern, central and western areas. Interestingly, significant energy efficiency spatial spillovers can be clearly found between regions within the western area and across the eastern and western areas. It is found that, energy structure, energy price, railway transportation development and R&D stock are significant at national level. However, energy structure and railway transportation development are insignificant in the central and western areas, while energy price and R&D stock are insignificant in the eastern and central areas, respectively. Industrial structure and urbanization level are found to be insignificant at national level, but industrial structure is significant in the eastern and western areas, and urbanization level is significant in the central and western areas. Surprisingly, industrial structure and urbanization level are found to have positive impacts on energy efficiency in the western area. In addition to regional disparities and local conditions, policies making should take efficiency spatial spillovers into consideration. Several interesting policy implications are achieved.