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Do Factor Market Distortions and Carbon Dioxide Emissions Distort Energy Industry Chain Technical Efficiency? A Heterogeneous Stochastic Frontier Analysis

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  • Hengfan Lu

    (School of Public Administration, China University of Geosciences (Wuhan), Wuhan 430074, China)

  • Jiachao Peng

    (Wuhan Institute of Technology, Law and Business School, Wuhan 430205, China
    Center for High Quality Collaborative Development of Resources, Environment and Economy, Wuhan Institute of Technology, Wuhan 430205, China)

  • Xiangyi Lu

    (School of Economics and Management, China University of Geosciences (Wuhan), Wuhan 430074, China)

Abstract

China’s high-quality economic development is hampered by market distortions, and promises to achieve peak carbon emissions by 2030, meaning that its economic growth faces serious environmental constraints. We use a heterogeneous stochastic frontier model to analyze the impact of factor market distortions and carbon dioxide emissions on economic growth, and to evaluate the Chinese energy industry’s chain technical efficiency under the influence of factor distortions and carbon dioxide emissions. Finally, the counterfactual measurement method is used to calculate the factor market distortions and loss of the energy industry chain technology efficiency as a result of carbon dioxide emissions. The main research results show that China’s energy technology efficiency is 0.959, and the average energy industry chain technical efficiency for each region from the highest to the lowest is east (0.961), center (0.957), northeast (0.955), and west (0.950). The space for efficiency improvement is 3.6377%, 4.5151%, 4.7669%, and 5.2521%, respectively. Factor market distortion and carbon dioxide emissions are the main sources of losses of energy industry chain technical efficiency. Although the energy industry chain technical efficiency is subject to market factors, the structural factors caused by sustainable efficiency are more obvious. In the case of factor market distortions and carbon dioxide emissions, China’s energy industry chain technical efficiency slowly increased from 0.952 in 2000 to 0.964 in 2016. By reducing the degree of factor market distortion, China’s average energy industry chain technical efficiency will rise to 0.9651 from 0.9649, representing an improvement of 3.6162%.

Suggested Citation

  • Hengfan Lu & Jiachao Peng & Xiangyi Lu, 2022. "Do Factor Market Distortions and Carbon Dioxide Emissions Distort Energy Industry Chain Technical Efficiency? A Heterogeneous Stochastic Frontier Analysis," Energies, MDPI, vol. 15(17), pages 1-22, August.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:17:p:6154-:d:896739
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