Allocation Efficiency and Shadow Prices of Energy Inputs in China: A Multi-Energy Approach

Enhancing energy efficiency is a critical pathway for China’s achievement of carbon peaking and carbon neutrality goals while maintaining economic growth. The deviation between actual factor prices and shadow prices is a major source of low total factor energy efficiency. Therefore, evaluating the allocative efficiency of production factors, including energy, should be addressed. In consideration of China’s energy endowment, energy transition, and unbalanced sustainability of various energy sources, this study adopts a stochastic frontier model with a generalized cost function to measure the allocative inefficiency of coal, oil, natural gas, and electricity and heat in China. The results indicate the following: (1) From 2005 to 2022, both technical efficiency and energy factor allocative efficiency remained below 1 at the provincial level, while technical efficiency declined gradually and allocative efficiency exhibited an upward spiral trend. (2) Labor, coal, oil, natural gas, and electricity and heat are found to be overutilized relative to capital; moreover, except for capital, all other factors are excessively employed relative to electricity and heat. (3) Setting capital factors as standardization factors, the shadow prices of coal, oil, natural gas, and electricity and heat are all higher than the actual prices. This indicates that China can reasonably allocate factors through full market competition and government regulation, thereby improving energy utilization efficiency.