Empirical Analysis of Provincial Energy Efficiency in China

This paper proposes an energy efficiency index based on the data envelopment analysis approach. The index is used to examine energy efficiency in China. Using 1997-2006 panel data for 29 provinces, we find that energy efficiency is negatively associated with the secondary industry share in GDP, the state-owned economic share in GDP and the government expenditure share in GDP, and is positively associated with the technical level and non-coal share in energy consumption. In addition, we find that there exists a large gap in energy efficiency among eastern, central and western regions. The eastern region has a significantly higher energy efficiency level than the central and western regions. We conclude that the different levels of industry structure, government intervention, energy structure, and the technology content in the three regions lead to the differences in energy efficiency.