Modeling the dynamics of carbon emission performance in China: A parametric Malmquist index approach

This paper contributes to the existing literature on the methodology of modeling the dynamic of carbon emission performance. Based on the analytical framework of Zhou et al. (Energy Economics, 32, 194–201, 2010), we develop a parametric Malmquist index approach that takes into account statistical noises. Moreover, the fixed-effect panel stochastic frontier model is employed to deal with regional heterogeneity. The proposed approach is applied to analyze the dynamics of carbon emission performance in 30 Chinese provinces during the period of 2000–2010. The main findings are as follows. First, the carbon emission performances of 30 provinces as a whole improved by 4.1% annually during the sample period, which was mainly driven by efficiency change component. Second, the east area shows the best performance with an average Malmquist CO2 emissions performance index (MCPI) of 1.108, followed by the central area (1.039). Unlike the east and central areas, the west area experienced deterioration in carbon emission performance. More effective environmental policies should be implemented to change the situation. Third, compared with the proposed approach, the nonparametric approach tends to underestimate China's MCPI and gives rise to volatile results.