Does the Central Government’s Environmental Policy Work? Evidence from the Provincial-Level Environment Efficiency in China

Qiong Xia, Min Li, Huaqing Wu and Zhenggang Lu
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Qiong Xia: School of Economics, Hefei University of Technology, Hefei 230009, Anhui, China
Min Li: School of Economics, Hefei University of Technology, Hefei 230009, Anhui, China
Huaqing Wu: School of Economics, Hefei University of Technology, Hefei 230009, Anhui, China
Zhenggang Lu: School of Economics, Shanghai University, Shanghai 200444, China

Sustainability, 2016, vol. 8, issue 12, 1-17

Abstract: This paper aims at checking the effectiveness of environmental policy pushed by the Central Government at provincial level since China’s entry into the World Trade Organization (WTO). For this purpose, the industrial system of each province is divided into industrial production sub-system and pollution treatment sub-system, and a novel slack-based measure data envelopment analysis (SBM-DEA) model with non-cooperative game is proposed to evaluate the environment efficiency of both industrial production sub-system and pollutant treatment sub-system. The results show that the proposed model can describe the environmental efficiency more precisely than the traditional DEA models. During 2003–2012, the efficiencies of industrial production sub-system and pollution treatment sub-system at the provincial level are both relatively low. Specifically, the efficiency of industrial production is not only lower than pollution treatment efficiency, but is falling generally, especially in the Eastern area. However, in the Central and Western area, the efficiency of industrial production remains relatively stable, and pollution treatment efficiency is rising steadily. The technology gap between the Central/Western area and the Eastern area is narrowing, particularly concerning pollution treatment technology. We thus conclude that though the Central Government’s environmental policies fail to solve the inner contradiction between economic and environmental systems, and they indirectly contribute to the expansion of pollutant treatment technology among the Eastern, Central, and Western areas, which is conducive to the coordinated development among different areas.

Keywords: environmental policy; efficiency evaluation; data envelopment analysis (DEA); non-cooperative game (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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