How to improve sustainability for industrial sectors: Optimizing production scales based on performance-oriented resource reallocation

Juan Du, Yanhong Xu and Yi Wang

Energy Economics, 2023, vol. 119, issue C

Abstract: In order to reduce carbon emissions and achieve green development, it is one of the effective ways to adjust industrial production scales through reallocating resources. Under the framework of data envelopment analysis, this paper develops a performance-oriented model to reallocate resources and to determine the optimal sustainable production scales for various industrial sectors. An empirical study on 15 industries from 30 provinces in China during 2006 to 2019 verifies the effectiveness of our proposed method and gives some interesting insights. The empirical results demonstrate that the majority of sustainable industries have shown a trend that actual carbon dioxide emissions are constantly approaching the ideal state during the observing years, indicating that their sustainability performance has been improving continuously. However, high-energy industries have exhibited significant divergence. Some have improved the sustainability, while others have experienced a stagnant or even retrogressive emissions-reducing process. Moreover, via redistributing resources, customized optimal adjustments in production scales are obtained for different types of industries. The main contributions of this paper are summarized as follows. First, the proposed approach innovatively incorporate the constraints on sustainability efficiency in modelling resource reallocation, which avoids the unreasonable allocation where resources are completely tilted to the best-performing minority. Second, by adjusting production scales according to our model, the sustainability performance of most industries will be greatly improved to the efficient frontier. Third, considering the energy consumption characteristics, this study suggests targeted goals on sustainable development and matching adjustment directions on production scales for different types of industries.

Keywords: Data envelopment analysis; Performance-oriented resource reallocation; Sustainability; Carbon emissions; Production scales (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:119:y:2023:i:c:s0140988323000233

DOI: 10.1016/j.eneco.2023.106525

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