Regional equity in the energy transition: Assessing the role of productivity gaps and technology selection

Achieving a just energy transition requires regional equity. This study proposes that productivity gaps can drive faster transitions in lagging regions and reduce regional imbalances. We analyze energy productivity catch-up in 284 Chinese cities and find that the productivity gap and growth rate correlate positively. Thus, cities with lower productivity levels can experience faster productivity growth than frontier cities. In particular, technology diffusion and productivity catch-up rates are significantly higher after narrowing the scope by geographical distance and energy factor structure. Using a dual-weight spatial econometric model, we show that technology diffusion is not neutral. Spatial diffusion of directed technology and mismatches in the structure of local factor endowments lead to energy misallocation and impede productivity growth. Therefore, we argue that Chinese cities can achieve convergence in energy transition through productivity catch-up. The prerequisite is that lagging cities determine the direction of technological change based on their production factor characteristics and adopt advanced technologies on this basis. The study provides a novel perspective for achieving a just energy transition.