Science of the Total Environment 690 (2019) 1190–1202

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Science of the Total Environment

journal homepage: www.elsevier.com/locate/scitotenv

An evaluation of greenhouse gas emission efficiency in China's industry

based on SFA
Jingchao Sun, Tao Du ⁎, Wenqiang Sun, Hongming Na, Jianfei He, Ziyang Qiu, Yuxing Yuan, Yingnan Li
SEP Key Laboratory of Eco-Industry, Northeastern University, Shenyang, Liaoning 110819, People's Republic of China
School of Metallurgy, Northeastern University, Shenyang, Liaoning 110819, People's Republic of China

H I G H L I G H T S G R A P H I C A L A B S T R A C T

• China's GHG efficiency at industry level

is assessed by stochastic frontier analy-
sis.
• At night, net electricity is better than
small-scale on-site coal-fired power
plant.
• Technology advance is better to im-
prove efficiency and mitigate GHG
emissions.
• Energy efficiency and GHG efficiency are
dependent but loosely related indexes.

a r t i c l e i n f o a b s t r a c t

Article history: As one of the largest countries with sound industrial systems in the world, China is a major emitter of greenhouse
Received 21 May 2019 gases. In order to achieve sustainable development, the analysis of greenhouse gas emissions from industry is of
Received in revised form 5 July 2019 great significance. This research evaluates the greenhouse gas emission efficiency (GHG efficiency) at industry
Accepted 6 July 2019
level in 26 sectors of China and analyzes the impacts of its determinants using stochastic frontier approach. Fur-
Available online 8 July 2019
thermore, the correlations for GHG efficiency with its determinants and other proxies are estimated by Kendall's
Editor: Huu Hao Ngo rank analysis. Industry level data from Chinese processing and manufacturing industries spanning over the pe-
riod 2000–2016 are used for this analysis. Results show that there has little potential to improve GHG efficiency,
Keywords: then technology progress is necessary. The GHG efficiency performance responds both to changes in the propor-
GHG efficiency tion of net electricity use and the ratio of electricity price to coal price; meanwhile the technology capacity also
Stochastic frontier analysis has a positive impact. Besides, three main proxies of GHG intensity, energy efficiency and energy intensity
Correlation have their own significance respectively, but could not represent GHG efficiency.
China's emission trading scheme (ETS) © 2019 Elsevier B.V. All rights reserved.

1. Introduction

As the world's largest emitter of greenhouse gases currently, China

⁎ Corresponding author at: SEP Key Laboratory of Eco-Industry, Northeastern
University, Shenyang, Liaoning 110819, People's Republic of China.
E-mail address: dut@smm.neu.edu.cn (T. Du).
has been the main pusher and catalyst for Global Climate Governance
according to Greenpeace (Greenpeace, 2018). Referring to the
Greenpeace and Intergovernmental Panel on Climate Change, the total car-
bon dioxide emission of China in 2017 is 9232.6 million tons, accounting

https://doi.org/10.1016/j.scitotenv.2019.07.093
0048-9697/© 2019 Elsevier B.V. All rights reserved.
 J. Sun et al. / Science of the Total Environment 690 (2019) 1190–1202
for about a quarter of global carbon dioxide emission, which leads to the
deterioration of living environment and severe air pollution
(Greenpeace, 2018; Shen and Wang, 2013). The primary cause of this
phenomenon is the side effects of rapid China's industrial development
(Gao et al., 2018). To face a series of environmental impact challenges
(Sun et al., 2019a, 2019b) such as global warming caused by greenhouse
gases, China started Emission Trade Scheme(ETS) in 2013, and it has im-
plemented seven pilot carbon markets in various zones, including Bei-
jing, Chongqing, Guangzhou, Hebei, Shanghai, Shenzhen and Tianjin to
achieve the promise that China reduces the carbon intensity per unit
of GDP by 60–65% by 2030 in the Conference of Parties (Lin and Jia,
2019). Coal is the main fossil resources and energy in China, while it is
also a greenhouse gas producer. The changes have taken place in the
structure of energy consumption used in manufacturing and processing
industries in recent years that are mainly in the proportion of net elec-
tricity in entire energy consumption. Of course, the prices of electricity
and coal are essential factors affecting greenhouse gas efficiency as well.
The global CO2 efficiency was evaluated among 170 countries from
1997 to 2007 using a stochastic cost frontier, which indicated that
there are great differences in efficiency level among countries and
China has the lowest level though CO2 efficiency also improved like
other counties, and the author put forward some political advise at last
(Herrala and Goel, 2012). Furthermore, it was estimated at province
level as well. Jiang et al. used stochastic frontier model by means of
translog production function to evaluate the technical energy efficiency
on the basis of panel data on 29 Chinese provinces from 2003 to 2011
(Jiang et al., 2016). Then, the author used a spatial Durbin error model
to judge the major determinants of energy efficiency. In order to achieve
the sustainable development of industry, measuring the carbon emission
efficiency from 2009 to 2015 in Anhui province in China with the method
of data envelopment analysis Malmquist analysis. It shows that the trend
of carbon efficiency is rising, and the major factor is technical progress
(Qiu and Yu, 2017). On the city level, the purpose was to evaluate energy
efficiency for 285 cities in China during 2008–2012 (Wang et al., 2017a).
And the other aim was to reduce carbon emission and improve its energy
efficiency with the slacks-based measure approach. The results showed
most of the cities had relatively low energy efficiency. However, it also
means great potentials to improve energy efficiencies.
There are also many studies on industry level. Martínez et al. esti-
mated the energy efficiency and analyzed the trends in energy con-
sumption and CO2 emissions in Swedish manufacturing industries in
the period 1993–2008 using production frontier model at two-digit
level (Pardo Martínez and Silveira, 2012). The results showed that
many factors like electricity consumption, investments, total factor of
productivity, energy prices and energy and CO2 taxes have negative in-
fluences on CO2 consumption. Similarly, Weyman-Jones et al. focused
on the non-residential electric energy efficiency in the Portuguese econ-
omy measured by the method of stochastic frontier analysis (SFA)
(Weyman-Jones et al., 2016) and using the time-series sample of non-
residential electrical energy consumption from 1970 to 2014 to analyze
the influencing factors. It showed that measuring energy efficiency im-
provement is very critical for energy policy and energy studies.
Moreover, Lundgren et al. estimated energy efficiency of the 14 sec-
tors in Swedish manufacturing using single-stage SFA and analyzed the
influencing factors of energy efficiency such as European Union Emis-
sion Trading System (EU ETS), carbon intensity and so on with a firm
level. Results show that carbon efficiency doesn't equal to energy effi-
ciency, and the EU ETS has little effect on energy efficiency (Lundgren
et al., 2016). The efficiency of carbon trading market was evaluated in
China, and it had weak efficiency but still had the signs of restoring mar-
ket efficiency as results (Zhao et al., 2017). Recently, Löschel et al. inves-
tigated the impact of EU ETS for the efficiency of economic performance
on the scale of manufacturing firms in Germany (Löschel et al., 2019). Its
results suggested that the EU ETS had a significant positive impact on
the regulated firms. Na et al. made a detailed analysis on CO2 of the dif-
ferent process in a specific iron and steel manufacturing route with
1191
results such as the more molten iron is used, the more carbon dioxide
is emitted in the steel industry (Na et al., 2017). Brännlund et al. ana-
lyzed carbon intensity performance and the effectiveness of the Swed-
ish CO2 tax (Brännlund et al., 2014). It found that Firms' carbon
intensity performance had reactions with the changes of the CO2 tax
and fossil fuel price, but was more sensitive to the tax.
As discussed in the previous studies, there are four main energy effi-
ciency evaluation methods. In order to evaluate the efficiency in indus-
try reasonable, the author illustrates these four methods, including
stochastic frontier analysis, data envelopment analysis, exergy analysis
and benchmark comparison (Li and Tao, 2017). In addition, it is found
that the analysis of the relationship between overall energy efficiency
and influencing factors is applicable to econometric models. They also
made a review of energy efficiency estimation using these four different
methods (Li and Tao, 2017). Yang et al. did similar research along with
SFA and data environment analysis (DEA) as well, and comparing the
differences between these two methods (Yang and Lei, 2016).
The energy efficiency and carbon dioxide emission are evaluated by
the method of input-output analysis (Lin and Sun, 2010). Cheng et al.
estimated energy efficiency, carbon dioxide emission efficiency and an-
alyzed its impacts using DEA (Cheng et al., 2018). As for stochastic fron-
tier approach, which is adopted in this research, and the different forms
of SFA are used to evaluate energy efficiency in the diverse field. These
results show that SFA is a suitable method to estimate energy efficiency
and energy inefficiency, which are so important for policymakers
(Filippini and Charles Hunt, 2011; Filippini and Hunt, 2015; Filippini
et al., 2014).
The robustness of these two measures of Spearman and Kendall cor-
relation were researched. The Kendall's rank is better than Spearman's
rank correlation in the aspects of robust and efficient (Croux and
Dehon, 2010). That energy and other input prices play in reducing the
energy intensity of manufacturing industries in Canada were studied.
The results indicate that both capital and labor are complementary to
energy (Gamtessa, 2016).
The main purpose of this research is to evaluate emission reduction
potential to increase carbon efficiency for 35 Chinese industries cover-
ing the period 2000–2016 using SFA. Carbon intensity is a normal indi-
cator but as a measure of carbon efficiency is non-applicable as it could
not reflect real efficiency. In this paper, the estimated efficiency scores
are to be interpreted as revealing not only the progress of the technol-
ogy of energy saving and emission reduction, the changes of industrial
structure and energy structure but also the potential to reduce carbon
emission while the level of production remains unchanged; in other
words, it is the emission reduction potential of industries. And the
other purposes are to investigate thoroughly and analyze the influenc-
ing factors of carbon efficiency which conditional estimate carbon effi-
ciency of industries, including CHN ETS, the energy structure and the
ratio of the price of electricity and coal.
The rest of this paper is organized as follows. Section 2 introduces
the methodology and the applied model. Section 3 describes the data
and its resource. Section 4 shows the results of the estimation and dis-
cussions. Section 5 makes a conclusion.
2. Materials and methods
In this study, in order to estimate the capability of the maximum
amount of output that can be produced from a given combination of in-
puts or the ability of reducing the minimum amount of inputs from a
given output, the stochastic frontier function approach introduced by
Aigner et al. and Meeusen et al. (Aigner et al., 1977; Meeusen and
Broeck, 1977) is used.
In contrast, the nonparametric efficiency analysis methods such as
data envelopment analysis (DEA) decided by their data without any as-
sumptions on the specific statistical distribution of the error terms, but
as for stochastic frontier analysis approach, it has the strength of
allowing for random shocks and measurement error, and another
1192 J. Sun et al. / Science of the Total Environment 690 (2019) 1190–1202
advantage of the SFA approach is that it is useful to analyze the factors of
and investigate the determinants of producer performance (Cullinane
et al., 2006).
There are many SFA models using different assumptions, and the
condition of time invariance is a strong assumption, especially in longer
panel. With the development of the stochastic frontier production func-
tion, a stochastic frontier analysis model with time-varying inefficiency
was built up by Coelli (Battese and Coelli, 1995; Coelli, 1995). It relaxes
this assumption and the modified inefficiency stochastic frontier pro-
duction function is a significant improvement over the former stochas-
tic frontier functions which do not have the technical inefficiency
effects. We use the industrial specific distance to the frontier as a mea-
sure of the level of energy inefficiency. Green et al. pointed out two
models to address the issue of unobserved heterogeneity when using
the panel data, the true fixed effects model, and the true random effects
model (Greene, 2005). And the true random effects model could con-
sider unobserved heterogeneity of the two stochastic terms that is for
time-variant factors. Thus, in order to discuss comprehensive factors
of the industrial level carbon efficiency in the estimations, the true ran-
dom effects model is used. The usefulness and advantages of SFA in
Bayesian statistics in over traditional SFA which just uses classical statis-
tics are proved as well (Carvalho and Marques, 2016).
The production process is affected by the compound errors, which
consists of two different unknown random error terms. One of the
two error components results in the deviation from the production
frontier by statistical objectives themselves and the reasons of the phe-
nomena may be mismanagement, policies or unsatisfactory inputs, they
all can also be interpreted as the indicators of nonnegative technical in-
efficiency. The other error component is a random variable which is not
controlled by themselves, such as weather, statistical error and the dif-
ferent performances of machinery and employees daily (Kumbhakar
and Lovell, 2000).
It is so crucial to estimate the inefficiency and evaluate the drivers of
inefficiency for policymakers (Battese and Coelli, 1995; Kumbhakar and
Lovell, 2000). These two ways to achieve the estimations of inefficiency
and inefficiency effects are two stages (Kalirajan, 1981) and single-
stage (Battese and Coelli, 1995). And the single-stage approach is used
in the random effects SFA model in this paper in order to estimate the in-
efficiency and obtain the conditional determinants of it as it avoids the es-
timation inconsistency in two-stage approach (Battese and Coelli, 1995).
Carbon intensity of industry as a relevant criterion is to analyze the
performance of the climate policy (Brännlund et al., 2014). According
to the Intergovernmental Panel on Climate Change (IPCC), there are
many greenhouse gases as atmospheric polluters such as CO2, N2O,
CH4 and especially CO2. Due to the limitation of diverse technology
levels in different industries, the combustion rate is commonly incom-
plete combustion, the average oxidation rate of different fuels is used
in this paper. We use the emission factors of IPCC to calculate pollutants
emission from industry level in this paper. The function is as follows:
X more efficient than Spearman's rank correlation, making it the prefera-
EGHG ¼ FQ i  FOij  EF ij  GWPij ð1Þ
where EGHG is greenhouse gas emissions, its unit is carbon dioxide
equivalent. FQi is the quantity of fuel i. FOij is oxidization ratio of green-
house gas j in fueli. EFij is the emission factors of greenhouse gas j in fuel i
. GWP is global warming potential of gas j in fuel i, whose data sources
refer to data provided by IPCC.
Greenhouse gas intensity is a crucial role in the research field of at-
mospheric environmental protection, and it is also an indispensable
data basic for policymakers. In this paper, greenhouse gas intensity is
as follows:
Em
cm ¼ GHG
Ym
where cm is greenhouse gas intensity of industry m. Emis greenhouse
GHG
gas emission of industry m, it is calculated by Eq. (1). Ym is gross indus-
trial output of industry m.
Based on the theoretical framework of Aigner et al. and the ‘true’
random effects specification of the stochastic production frontier refer-
ring to Belotti et al. (Aigner et al., 1977; Belotti et al., 2012) is as follows:
!
ytm  
ln t ¼ βm;0 þ βm;L ln Ltm þ βm;K lnK tm þ βm;E −1 lnEtm
Em
þ α m ln T þ βm;LK ln Ltm ln K tm þ βm;LE ln Ltm C tm
þ βm;LT ln Ltm ln T þ βm;KE lnK tm ln Etm
þ βm;KT lnK tm ln T þ βm;ET ln Etm ln T þ vtm þ utm ð3Þ
where ytm denotes the sell total production value of industry m at year t,
L and K represent labor and fixed capital, respectively. T is a time trend
variable in our case according to Greene et al., E stands for the aggregate
greenhouse gas emission for GHG efficiency or energy use for energy ef-
ficiency (Greene and Dan, 2004). In Eq. (3), labor, capital, time trend and
energy use are inputs, and they are treated as independent variables.
We take an assumption of the deterministic frontier to adopt the form
of a trans-log production function. We use maximum likelihood estima-
tion to implement the model. The residual two error terms in Eq. (3) are
a statistical noise term, vtm, and a non-positive random variable
depicting inefficiency utm.
In the first part, the statistical noise term vtm is assumed to be nor-
mally distributed usually that vtm~N(0, σv m2). The second part, utm,
which represents the underlying efficiency and is assumed to have
truncated-normal distribution that utm~N(μtm, σtm). In the following
Eq. (4), utm is denoted as conditional GHG inefficiency, and it is assumed
to be a function of a combination of GHG inefficiency factors. The func-
tion of conditional technical inefficiency is as follows:
t
utm ¼ γm;CETS CETStm þ γm;value valuem þ γm;ELE ELEtm þ γmEC EC tm
þ γ mEC TC tm þ υtm ð4Þ
where CETS denotes the China's National emission trading system,
which is a dummy variable taking the value one if industry m joins
this scheme. value is annual average price of carbon emissions transac-
tion. ELE is the ratio of purchased electricity to total energy consump-
tion. EC is the ratio of annual average electricity price to annual
average coal price. TC is the technical capacity, which indicates the
total value of out-put per capita. γ are the coefficients of different deter-
minant variables respectively. υ is the random error term.
Eq. (4) means that the energy efficiency and GHG efficiency control
variables are displayed in the mean of the exponential distribution of
utm. υtm is explained as a random error term. Estimated energy efficiency
and carbon equivalent efficiency estimates can be translated to efficiency
mt mt
scores and carbon equivalent scores according to EIe, c = exp (−ue, c).
There are three measures that are used to looking into the cross cor-
relation between two different values. The Pearson correlation is one of
the most often used in statistics, but Spearman's rank and Kendall's rank
have more robustness and higher efficiency than Pearson's correlation
(Atkinson et al., 2004). The Kendall's rank measure is more robust and
ble estimation (Croux and Dehon, 2010). This research will estimate the
correlation between different values using Kendall's rank measure.
The model approach is based on the assumption of the different in-
dustries which have the same characteristic of energy input and sell
total production value output. In this case, we can get the GHG efficiency
as the index used for measuring technical progress of greenhouse gas
emission reduction and its reduction potential.
3. Data description
The data of this study consist of a panel data which covers 26 Chinese
manufacturing sectors above designated size from 2000 to 2016, includ-
ð2Þ
ing Ferrous Metals, Articles, Beverage, Chemical Fiber, Chemical Raw
Material and Chemical Products, Electronic Equipment, Electrical Ma-
chinery, Foods, Furniture, General Purpose Machinery, Leather, Measur-
ing Instrument, Medicines, Metal Products, Non-metallic Mineral
 J. Sun et al. / Science of the Total Environment 690 (2019) 1190–1202 1193

Table 1 example, the transport equipment was divided into three sectors after
Descriptive statistics of variables in the stochastic production frontier functions. Mean 2012: automobile, railway-ship-aerospace and other transportation
values 2000–2016.
equipment manufacturing, which are merged in this study. Besides,
Variable/unit Minimum Maximum Mean Standard the transaction prices of variables come from the China's Carbon Price
deviation Survey (Slater et al., 2018), the China Coal Resources Network (Sxcoal.
Output/billion yuan 5.8763 10.8906 8.8437 1.0727 com., 2019) and the National Power Price Regulatory Bulletin
Labor/person 2.9237 6.8499 5.2130 0.8820 (Administration, 2017). The detailed descriptive statistics are shown
Capital stock/billion yuan 5.0947 10.5680 8.1205 1.0916
in Table 1.
Emissions/t CO2e 5.5471 12.5115 8.5573 1.6436
Energy/kg standard coal (kgce) 4.1326 11.6204 7.2219 1.7317 As an output variable for stochastic production frontier model, the value
of production measured in monetary values reflects 2000-year price de-
noted in RMB, the values of other variables are the same as it is. The annu-
Products, Paper, Special Purpose Machinery, Textile, Textile Wearing ally average number of employees in industry indicates the use of labor
Apparel, Tobacco, Transport Equipment, Non-ferrous Metals, Printing, from China Labor Statistics Yearbook (BPESC, 2001–2017). Capital stocks
Agricultural Products, Petroleum, Wood. These data come from the Sta- are calculated by the perpetual inventory method using gross investment
tistics of China (NBSC, 2019) and China Statistical Yearbook (NBSC, data denoted in RMB with reference to China Statistical Yearbook (NBSC,
2001–2017a). Because of the change of the statistical caliber in 2003 2001–2017a). The aggregated energy use is computed based on the elec-
and 2012, more detailed classifications of sectors were collected. For tricity and fuel use is measured in kilogram standard coal (kgce) according
to the Statistics of China (NBSC, 2019) and the China Energy Statistical Year-
Table 2
book (NBSC, 2001–2017b). We calculate the CO2 equivalent emissions from
Descriptive statistics of variables in the inefficiency function Mean values 2000–2016
(standard deviation in parenthesis).
the aggregate fuel use and the purchase of electricity referring to the Na-
tional Power Price Regulatory Bulletin (Administration, 2017), the conversion
NO. Sector Electricity GHG Technical Energy coefficients refer to the Intergovernmental Panel on Climate Change (Shen
proportion intensity capacity intensity
and Wang, 2013) and China Industrial Statistical Yearbook (NBSC,
1 Ferrous metals 0.0919 7.2500 0.7002 8.5371 2001–2017c). The CO2 emissions are measured in t CO2 equivalent (t CO2e).
(0.0109) (2.5598) (0.1830) (0.5819)
The variables in the inefficiency function are given in Eq. (4), includ-
2 Articles 0.4786 0.9974 0.2217 3.0413
(0.0639) (0.4449) (0.0292) (0.3905) ing ETS (CHN ETS dummy variable), electricity proportion (purchasing
3 Beverage 0.1571 0.8000 0.1994 3.5209 electricity/total energy consumption), the GHG intensity (emission/
(0.0384) (0.3862) (0.1210) (0.2330) sales), ratio of net electricity price to coal Price (value of a unit standard
4 Chemical fiber 0.2961 2.2003 0.1113 5.6275 coal), technical capacity (sales/labor). Descriptive statistics for electric-
(0.1075) (1.6780) (0.0232) (0.4870)
5 Chemical raw material and 0.1373 3.9167 0.8352 6.5391
ity proportion, GHG intensity, ratios of net electricity price to coal
chemical products (0.2526) (1.7690) (0.1234) (0.3531) price and technical capacity are presented in Table 2.
6 Electronic equipment 0.6517 0.1457 0.8725 4.2091 Fig. 1 illustrates the price ratio of net electricity to coal in Chinese in-
(0.1414) (0.0233) (0.1826) (0.3990) dustry from 2000 to 2016. The trend of the price ratio is stable during
7 Electrical machinery 0.5119 0.2091 0.7092 4.2877
the first four years of the 2000s. In the followed ten years the price
(0.0949) (0.0573) (0.1528) (0.7252)
8 Foods 0.1763 0.9147 0.2305 5.4086 ratio fell. However, in 2015 it was back to 2006 level. Then in 2016 the
(0.0173) (0.4742) (0.0370) (0.3155) ratio fell to approximately the minimum point that is at 2012 level.
9 Furniture 0.4279 0.2870 0.0901 1.3657 In Fig. 2, the greenhouse gas (GHG) intensity and energy intensity in
(0.1263) (0.1941) (0.0207) (0.4428) all 26 sectors during 2000–2016 are presented, calculated as ten thou-
10 General purpose 0.3601 0.5162 0.5167 6.8318
machinery (0.0696) (0.2416) (0.1158) (0.8635)
sand tons CO2e/billion yuan output and ten million kgce/billion yuan
11 Leather 0.4510 0.2355 0.2090 2.3977 output respectively. The general trend of GHG intensity and energy in-
(0.1306) (0.0711) (0.0216) (0.7440) tensity is to fall, and the downward trend is more significant from
12 Measuring instrument and 0.5759 0.2112 0.1038 2.4345 2000 to 2011, while the gentle trend after 2012 is shown. As mentioned
machinery (0.1190) (0.0901) (0.0221) (0.3215)
before, GHG intensity is normal deemed as a proxy of greenhouse gas
13 Medicines 0.2564 0.6923 0.2076 4.6511
(0.0389) (0.3244) (0.0311) (0.5399) emissions. That the efficiency of greenhouse gas emission has negative
14 Metal products 0.5948 0.7353 0.3984 3.6280 correlation with its intensity is expected. Results of that will be shown
(0.1160) (0.2927) (0.0732) (0.6413) in the next section.
15 Non-metallic mineral 0.1185 5.9252 0.6986 7.5512
products (0.0237) (2.9974) (0.1201) (0.6246)
Notes: Ferrous Metals represents Manufacture and Processing of Ferrous Metals; Articles
16 Paper 0.1713 2.7279 0.2311 5.2720
represents Manufacture of Articles for Culture, Education and Sport Activity; Beverage rep-
(0.0109) (0.8445) (0.0425) (0.9936)
resents Manufacture of Beverage; Chemical Fiber represents Manufacture of Chemical Fi-
17 Special purpose 0.3504 0.4819 0.3182 3.6742
ber; Chemical Raw Material and Chemical Products represents Manufacture of Chemical
machinery (0.1161) (0.2849) (0.0490) (0.5872)
Raw Material and Chemical Products; Electronic Equipment represents Manufacture of
18 Textile 0.3823 1.0124 0.7722 5.6229
Communication Equipment, Computer and Other Electronic Equipment; Electrical Ma-
(0.0858) (0.2406) (0.1885) (0.2815)
chinery represents Manufacture of Electrical Machinery and Equipment; Foods represents
19 Textile wearing apparel 0.3956 0.2680 0.3093 4.1429
Manufacture of Foods; Furniture represents Manufacture of Furniture; General Purpose
(0.0896) (0.0728) (0.0256) (0.2644)
Machinery represents Manufacture of General Purpose Machinery; Leather represents
20 Tobacco 0.3541 0.2554 0.0568 1.8994
Manufacture of Leather, Fur, Feather and Its Products; Measuring Instrument and Machin-
(0.1412) (0.2023) (0.0161) (0.3186)
ery represents Manufacture of Measuring Instrument and Machinery for Cultural Activity
21 Transport equipment 0.3841 0.3285 0.7140 4.9810
and Office Work; Medicines represents Manufacture of Medicines; Metal Products repre-
(0.1081) (0.1884) (0.1243) (0.2747)
sents Manufacture of Metal Products; Non-metallic Mineral Products represents Manufac-
22 Non-ferrous metals 0.4237 2.6161 0.4406 6.8333
ture of Non-metallic Mineral Products; Paper represents Manufacture of Paper and Paper
(0.4877) (0.9636) (0.1547) (0.7266)
Products; Special Purpose Machinery represents Manufacture of Special Purpose Machin-
23 Printing 0.5511 0.4685 0.0780 1.9302
ery; Textile represents Manufacture of Textile; Textile Wearing Apparel represents Manu-
(0.1086) (0.2058) (0.0052) (0.3288)
facture of Textile Wearing Apparel, Footwear and Caps; Tobacco represents Manufacture
24 Agricultural products 0.2284 0.6151 0.8185 6.9439
of Tobacco; Transport Equipment represents Manufacture of Transport Equipment; Non-
(0.0565) (0.4289) (0.1657) (1.8136)
ferrous Metals represents Manufacture and Processing of Non-ferrous Metals; Printing
25 Petroleum 0.0092 12.6854 0.3579 7.5337
represents Printing, Reproduction of Recording Media; Agricultural Products represents
(0.0016) (2.7439) (0.0726) (0.3263)
Processing of Food from Agricultural Products; Petroleum represents Processing of Petro-
26 Wood 0.3371 0.8298 0.1749 4.4822
leum, Coking, Processing of Nucleus Fuel; Wood represents Processing of Timbers, Manu-
(0.1203) (0.4188) (0.0462) (0.2195)
facture of Wood, Bamboo, Rattan, Palm and Straw Products.
1194 J. Sun et al. / Science of the Total Environment 690 (2019) 1190–1202

Fig. 1. The Price Ratio of Net Electricity to Coal in Chinese processing and manufacturing
industry 2000–2016.

In Fig. 3, the energy consumption in all 26 sectors during 2000–2016

are presented. The general trend of total energy consumption is to rise,
and the downward trend is more significant in recent year, while the
gentle trend after 2013 is shown. As mentioned before, coal is normal
deemed as the main energy during the whole time in China. Crude oil,
coke and electricity are also in the important positions and showed in
descending order by the amount of energy.
The annual mean transaction value of ETS is adopted from 2013 to
2016. It is hard to see the influence of ETS pilots to GHG efficiency
from the original data. We will discuss specific correlation through de-
tail calculation in next section.
4. Results and discussions
In this section, the results of GHG efficiency from estimating stochas-
tic production frontier conditioned on various factors as mentioned
above are presented and analyzed. There are two parts to explain the re-
sults. In the first part, the estimated time-variant GHG efficiency score
and the influencing factors' correlation with it will be shown in
Section 4.1. Second, comparing these proxies and the results of GHG ef-
ficiency, GHG intensity, energy efficiency and energy intensity will be
displayed in Section 4.2.
Fig. 3. Energy consumption in Chinese processing and manufacturing industry
2000–2016.
and the gross sales output growth rate slowed as the changes of eco-
nomic environment. The week negative sign for value which means
that the week correlation between value and GHG inefficiency. ELE has
negative effects with GHG inefficiency, and EC has opposite effects. In
general, adding proportion of electric energy in whole energy and
adjusting the radio of electricity to coal price would reduce GHG ineffi-
ciency. The impact of technical capacity has the similar correlation with
GHG inefficiency totally like ELE, the increasing of GHG efficiency along
with the progressing of technical capacity as well. The detail analysis for
each sector is presented later. The last two columns show the variance
parameters of σu and σv that are statistically significant.
The descriptive statistics for the whole underlying GHG efficiency of
all sectors in China from the econometric estimation in Table 4, showing
that the average value efficiency is estimated to be about 89.55%, the
median efficiency score is 92.80% and there are dispersions near the
mean efficiency score.
It presents the average GHG efficiency scores for every industry in
three periods of the estimation, in the whole period and its minimum

4.1. GHG efficiency scores and the correlation with its determinants
Table 3
The estimation results for stochastic production frontier model, Estimation results for the GHG efficiency.
Eqs. (3) and (4), are given in Table 3, presenting the estimated coeffi-
Parameters Coefficients Standard error P-value
cient of and the impacts of the determinants of GHG inefficiency in Chi-
Ln E_GHG −0.5856 0.0752 0.000
nese manufacturing and processing industries that cover 26 sectors. The
Ln L 1.2590 0.9479 0.000
positive sign for ETS which means that ETS may has no use to promote Ln K −0.4507 0.8819 0.000
GHG efficiency rising, but the growth of energy use and greenhouse T 0.1551 0.0164 0.000
gas emission slowed down and declined during ETS implementation, Ln E_GHG Ln E_GHG 0.0586 0.0091 0.000
Ln L Ln L 0.0660 0.0085 0.000
Ln K Ln K 0.3229 0.0048 0.000
TT −0.0018 0.0006 0.001
Ln E_GHG Ln L 0.0826 – –
Ln E_GHG Ln K −0.2387 0.0095 0.000
Ln L Ln K −0.3488 – –
T Ln E_GHG 0.0164 0.0026 0.000
T Ln L 0.0272 0.0034 0.000
T Ln K −0.0419 0.0034 0.000

Impacts of inefficiency determinants

ETS 5.1595 1.1788 0.000
value −0.1324 0.0375 0.000
ELE −3.8929 0.9554 0.000
EC 3.6203 0.8077 0.000
capacity −1.6864 0.9114 0.064

Variance parameters
E(σu) 0.1562
Fig. 2. GHG intensity and energy intensity in Chinese processing and manufacturing
σV 0.0888 0.0073 0.000
industry 2000–2016.
 J. Sun et al. / Science of the Total Environment 690 (2019) 1190–1202 1195

Table 4 that have plausible signs from the economic perspective in Table 3. The
Descriptive statistics of overall GHG efficiency scores. positive sign for time means that output per unit of GHG (CO2e) increas-
Min Max Mean Median St. dev. ing overtime in most sectors. Regarding the efficiency determinant equa-
0.4991 0.9958 0.8955 0.928 0.0931
tion, the results of estimations reveal that the impacts of CHN ETS and
transaction value have a neutral effect on GHG efficiency in 2013–2016
for most sectors, the reasons for this phenomenon may be that the period
and maximum in Table 5. From the perspective of time dimension, the
of ETS from starting is not for long enough, and the coverage is too-
overall trend of GHG efficiency in China's manufacturing industry is up-
narrow for the entire China's industries, such as Zhao et al. found that
ward, but more obvious fluctuations are appeared for some Individual
the efficiency of carbon trading market had weak efficiency in China
manufacturing industries in the period of 2012–2016. Meanwhile, the
(Zhao et al., 2017). The factors of electricity proportion and capacity
GHG efficiency scores in different industries vary remarkably from
have positive effects on GHG efficiency. However, there is a negative ef-
Table 5. Most industries are at high levels of GHG efficiency in this
fect of the impact of Electricity to Coal for vast majority sectors in China.
study. The industry with the highest GHG efficiency is the electronic
Again, there are more detailed analysis results of statistics as shown
equipment, whose GHG efficiency has achieved more than 90% in the
in Table 6. Coal is the primary fossil fuel consumed by China's industry,
whole period. Other industries such as the articles, the electrical ma-
and electricity to coal is a significant index on the performance of GHG
chinery, the measuring instrument and machinery, the textile and so
efficiency. The high correlation between GHG efficiency and the impacts
on also have higher levels of GHG efficiency relatively, whose mean
of electricity proportion and electricity to coal are revealed. The positive
GHG efficiency has also reached 90%. The relatively lower levels of
signs for electricity proportion in most sectors, adding the proportion of
GHG efficiency are estimated in the petroleum, the wood and the non-
electric energy in whole energy would increase GHG efficiencys. For ex-
metallic mineral products, but their mean GHG efficiency has got
ample, the correlation of electricity to coal of petroleum is 0 because the
more than 84% similarly. Nevertheless, the ferrous metals sector has
main fossil fuel of petroleum is fossil oil having no correlation with coal.
the lowest GHG efficiency, that gets 83.74% as well. All sectors have
less underlying GHG efficiency in general description.
Table 6
For the logarithmic form of variables in the stochastic production fron- Descriptive statistics of the cross-correlation between Sector's GHG efficiency and the im-
tier model, the estimated coefficients can be interpreted as elasticities pacts of its determinants.

Table 5 Sector Electricity Electricity ETS Transaction Technical

Descriptive statistics of Sector's GHG efficiency scores. proportion to Coal value capacity

Ferrous metals 0.3529⁎⁎ −0.3088⁎ −0.4281⁎⁎ −0.3603⁎ 0.6324⁎⁎⁎

Sector 2000–2005 2006–2011 2012–2016 Min Max Mean
Articles 0.5588⁎⁎ −0.3677⁎⁎ −0.2616 −0.2702 0.1471
(Mean) (Mean) (Mean)
Beverage 0.6912⁎⁎⁎ −0.6618⁎⁎⁎ 0.2616 0.2927 0.5588⁎⁎⁎
Ferrous metals 0.7587 0.9555 0.7902 0.5863 0.9757 0.8374 Chemical fiber 0.5000⁎⁎ −0.5000⁎⁎ −0.2140 −0.1576 0.4412⁎⁎
Articles 0.9152 0.9519 0.9240 0.8635 0.9830 0.9308 Chemical raw 0.6118⁎⁎⁎ −0.6765⁎⁎⁎ −0.0238 0.0225 0.8823⁎⁎⁎
Beverage 0.7757 0.9014 0.9231 0.7008 0.9676 0.8634 material and
Chemical fiber 0.7854 0.9450 0.8684 0.6590 0.9718 0.8662 chemical
Chemical raw 0.8074 0.9523 0.9159 0.7310 0.9787 0.8905 products
material and Electronic 0.5588⁎⁎⁎ −0.6471⁎⁎⁎ −0.0476 0.0000 0.5000⁎⁎⁎
chemical equipment
products Electrical 0.5294⁎⁎⁎ −0.5882⁎⁎⁎ −0.0951 −0.0676 0.8529⁎⁎⁎
Electronic 0.9420 0.9876 0.9731 0.9055 0.9958 0.9672 machinery
equipment Foods 0.4265⁎⁎ −0.7353⁎⁎⁎ 0.1189 0.1576 0.6618⁎⁎⁎
Electrical 0.8693 0.9815 0.9501 0.8025 0.9901 0.9327 Furniture 0.5588⁎⁎⁎ −0.7059⁎⁎⁎ 0.0951 0.1351 0.5588⁎⁎⁎
machinery General 0.3971⁎⁎ −0.6471⁎⁎⁎ −0.0951 −0.0450 0.8382⁎⁎⁎
Foods 0.7767 0.9165 0.9189 0.7576 0.9627 0.8679 purpose
Furniture 0.8638 0.9427 0.9399 0.8251 0.9762 0.9140 machinery
General 0.7600 0.9646 0.9225 0.6582 0.9779 0.8800 Leather 0.0294 −0.1177 −0.2854 −0.2252 −0.0294
purpose Measuring 0.3668⁎⁎ −0.4853⁎⁎⁎ −0.1903 −0.1351 0.4706⁎⁎⁎
machinery instrument
Leather 0.9387 0.9409 0.9287 0.8785 0.9856 0.9365 and
Measuring 0.9023 0.9673 0.9357 0.8490 0.9796 0.9350 machinery
instrument Medicines 0.3971⁎⁎ −0.5441⁎⁎⁎ 0.1427 0.1802 0.5⁎⁎⁎
and Metal products 0.6176⁎⁎⁎ −0.7059⁎⁎⁎ 0.7059 0.1351 0.7647⁎⁎⁎
machinery non-metallic 0.6324⁎⁎⁎ −0.7059⁎⁎⁎ 0.2616 0.3153 0.7206⁎⁎⁎
Medicines 0.8348 0.9143 0.9217 0.7750 0.9733 0.8884 mineral
Metal products 0.8567 0.9725 0.9551 0.6955 0.9905 0.9265 products
Non-metallic 0.7177 0.9134 0.9466 0.6936 0.9762 0.8541 Paper −0.2206 0.1471 −0.5946⁎⁎⁎ −0.5179⁎⁎ 0.5735⁎⁎⁎
mineral Special 0.6176⁎⁎⁎ −0.7794⁎⁎⁎ 0.1903 0.2252 0.8382⁎⁎⁎
products purpose
Paper 0.8982 0.9320 0.8530 0.7831 0.9470 0.8968 machinery
Special 0.6721 0.9370 0.9453 0.5965 0.9813 0.8459 Textile 0.5147⁎⁎⁎ −0.4265⁎⁎ −0.3092 −0.2252 0.2059
purpose Textile wearing 0.1765 −0.1912 −0.0714 −0.0225 −0.0147
machinery apparel
Textile 0.9386 0.9726 0.8971 0.7825 0.9849 0.9384 Tobacco 0.2941⁎ −0.3382⁎ 0.3805⁎ 0.4279⁎⁎ −0.25
Textile wearing 0.9234 0.9337 0.9347 0.8732 0.9800 0.9304 Transport 0.5882⁎⁎⁎ −0.7941⁎⁎⁎ 0.2378 0.2477 0.8235⁎⁎⁎
apparel equipment
Tobacco 0.9035 0.8946 0.9501 0.8304 0.9738 0.9141 Non-ferrous 0.4706⁎⁎⁎ −0.5147⁎⁎⁎ −0.1189 −0.0676 0.6912⁎⁎⁎
Transport 0.7643 0.9513 0.9621 0.6573 0.9907 0.8885 metals
equipment Printing 0.4706⁎⁎⁎ −0.75⁎⁎⁎ 0.3805⁎ 0.3828⁎ 0.2794
Non-ferrous 0.7246 0.9725 0.9130 0.4991 0.9845 0.8675 Agricultural 0.6176⁎⁎⁎ −0.6471⁎⁎⁎ 0.0000 0.0676 0.8529⁎⁎⁎
metals products
Printing 0.8592 0.9412 0.9682 0.8318 0.9848 0.9202 Petroleum −0.3529⁎⁎ 0.0000 −0.5470⁎⁎⁎ −0.4729⁎⁎ 0.5735⁎⁎⁎
Agricultural 0.8060 0.9599 0.9395 0.7342 0.9855 0.8996 Wood 0.5735⁎⁎⁎ −0.6324⁎⁎⁎ 0.3805⁎ 0.3828⁎ 0.4706⁎⁎⁎
products
⁎ Statistical significance at 10%.
Petroleum 0.8622 0.9204 0.7218 0.5154 0.9466 0.8414
⁎⁎ Statistical significance at 5%.
Wood 0.7155 0.8900 0.9597 0.6521 0.9797 0.8489
⁎⁎⁎ Statistical significance at 1%.
1196 J. Sun et al. / Science of the Total Environment 690 (2019) 1190–1202

But for electricity to coal, it has negative effects on the contrary with Table 7
electricity proportion that means adjusting the ratio of electricity to Estimation results for the energy efficiency.

coal price to decline could improve GHG efficiency. The causes leading Parameters Coefficients Standard error P-value
to this result may be the difference in generating efficiency between Ln E_EN 1.4847 0.0883 0.000
smaller-capacity generating set and larger-capacity generating set, Ln L −0.7438 – –
which have higher power generation efficiency. In order to reduce en- Ln K 2.899415 – –
ergy costs, the manufacturing and processing industries in China prefer T 0.0211 0.0364 0.562
Ln E_EN Ln E_EN −0.0506 0.0099 0.000
to build their own captive power plant to satisfy self-demand for elec-
Ln L Ln L −0.1164 0.0127 0.000
tricity, but the captive power plant has lower power generation effi- Ln K Ln K −0.2648 0.0082 0.000
ciency that means producing the same amount of electricity requires TT −0.0019 0.0008 0.022
more energy and more greenhouses gas emissions, it is not recom- Ln E_EN Ln L −0.1239 0.0205 0.000
mended for GHG efficiency. Power grid, waste heat power generation, Ln E_EN Ln K −0.0675 – –
Ln L Ln K 0.3933 – –
renewable energy power generation and on-site coal-fired power T Ln E_EN 0.0347 0.0018 0.000
plants are the main sources of power energy for manufacturing and pro- T Ln L −0.0191 0.0049 0.000
cessing industries, moreover, waste heat power generation and new en- T Ln K −0.0046 0.0068 0.500
ergy power generation have no excess greenhouse gas produced. In fact,
Variance parameters
according to the relevant investigation, it is more appropriate to choose σu 1.2099 0.5609 0.031
to use net electricity when the power load is low at night. Furthermore, σV 0.1401 0.0155 0.000
industry black carbon is the second strongest contribution to current λ 8.6342 0.5613 0.000
global warming that mainly comes from fuel incomplete combustion
in mini-plant. The volume of black carbon can be reduced by the The correlations of that of 26 industry sectors are presented in Table 9,
above-mentioned methods (Ramanathan and Carmichael, 2008; detailed see Fig. A2 of appendix.
Surabi et al., 2002). The impact of technical capacity has the similar ef- The negative correlations between GHG efficiency and GHG inten-
fects with electricity proportion, which has the positive signs in most sity are expected as the previous researches. Meanwhile the closer the
sectors, while neutral in some, indicating a progressing of technical ca- score of the correlation is to −1, the more consistent the results are
pacity along with an increase of the GHG efficiency. For example, there with previous studies. However, the average score of the correlations
is a strong positive correlation for GHG efficiency with the impacts of that are above statistical significance at 10% is 0.5853, which means me-
electricity proportion and technical capacity, but negative for electricity dium correlation between them. So, the GHG efficiency cannot be the
to coal in non-metallic mineral products. So, the industry of non- proxy that represents GHG intensity completely, but the GHG intensity
metallic mineral products should be encouraged to adopt waste heat could be one of the measurements of GHG efficiency. Furthermore, the
power generation and renewable energy power generation firstly, positive correlations between GHG efficiency and energy efficiency are
while the inadequate demand for energy should use purchasing elec- expected, but the correlation score of some sectors like Special Purpose
tricity rather than commission small-scale coal-fired power stations, Machinery is negative and some sectors have no relationship with GHG
improve production technology to increase labor productivity for efficiency, indicating that energy efficiency cannot be used to stand for
higher GHG efficiency, and in terms of price regulation, the price ratio GHG efficiency despite having a strong correlation in a minority of sec-
of electricity to coal should be reduced. tors. There are many ways to reduce greenhouse gases, one of the most
In general, there is less potential for GHG emission reduction from important and popular ways is to improve energy efficiency (Sun et al.,
Table 5, illustrating the booming emission reduction technologies re- 2018; Sun et al., 2017), the other one of that is to reduce the greenhouse
cently have not been widely applied in China's industries. From a com- gas emission directly by emission reduction technology like CO2 recov-
mon point of view, GHG efficiency is often assumed to be synonymous ery and utilization technology (Wang et al., 2017b). But the energy
with GHG intensity. And energy efficiency is always assumed to take
Table 8
place of GHG efficiency to be studied. In the next section, we investigate
Descriptive statistics of energy efficiency.
the difference among these four proxies of GHG efficiency, GHG inten-
sity, energy efficiency and energy intensity. The following analysis pro- Sector Min Max Mean Median
vides enough evidence to support if this assumption of these four Ferrous metals 0.6292 0.9605 0.8168 0.8324
proxies mentioned-above is valid. Articles 0.6566 0.9359 0.8621 0.8871
Beverage 0.6671 0.9321 0.8429 0.8719
Chemical fiber 0.6294 0.9309 0.8133 0.9058
Chemical raw material and chemical products 0.7563 0.9360 0.8704 0.8915
4.2. The correlations between GHG efficiency and these indexes of GHG in- Electronic equipment 0.6386 0.9318 0.8400 0.8599
tensity, energy efficiency and energy intensity Electrical machinery 0.7019 0.9518 0.8464 0.8707
Foods 0.7045 0.9469 0.8334 0.8255
Furniture 0.5857 0.9340 0.8244 0.8838
The estimation results of energy efficiency using the similar model,
General purpose machinery 0.3095 0.9580 0.7465 0.8606
Eq. (3), are given in Table 7, that presents the estimated coefficient of Leather 0.4598 0.9325 0.7931 0.8835
energy efficiency. The last two columns show the variance parameters Measuring instrument and machinery 0.7680 0.9335 0.8679 0.8589
of σu and σv are statistically significant. The sign of λ indicates that en- Medicines 0.4623 0.9414 0.8005 0.8664
ergy inefficiency is demonstrated in this model. Metal products 0.7416 0.9562 0.8501 0.8512
Non-metallic mineral products 0.5431 0.9506 0.8438 0.8734
The descriptive statistics for the whole underlying GHG efficiency of Paper 0.3125 0.9631 0.7505 0.8565
all sectors in China from the econometric estimation are listed in Special purpose machinery 0.5932 0.9449 0.8406 0.8610
Table 8, showing that the average value efficiency is estimated to be Textile 0.8531 0.9310 0.8776 0.8762
about 89.55%, the median efficiency score is 92.80% and there are dis- Textile wearing apparel 0.6831 0.9360 0.8488 0.8788
Tobacco 0.4110 0.9461 0.7782 0.8835
persions near the mean efficiency score. The more detailed descriptions
Transport equipment 0.6488 0.9591 0.8130 0.8558
are given in Fig. A1 of appendix for GHG efficiency, GHG intensity, en- Non-ferrous metals 0.6378 0.9508 0.8560 0.8688
ergy efficiency and energy intensity. Printing 0.6215 0.9488 0.7993 0.8265
In this section, the main purpose is that comparing the time-variant Agricultural products 0.6964 0.9415 0.8454 0.8424
industry level GHG efficiency scores with calculated indexes of GHG in- Petroleum 0.7734 0.9295 0.8684 0.8720
Wood 0.7015 0.9581 0.8468 0.8523
tensity, energy efficiency and energy intensity by Kendall's correlation.
 J. Sun et al. / Science of the Total Environment 690 (2019) 1190–1202 1197

Table 9 5. Conclusions
Correlation between GHG efficiency and these indexes of GHG intensity, energy intensity
and energy efficiency.
One of the main purposes of this research is to evaluate the GHG ef-
Sector GHG Energy Energy ficiency in Chinese manufacturing and processing industries that cover
intensity intensity efficiency 26 sectors during 2000–2016. GHG efficiency is defined as to explain
Ferrous metals −0.5735⁎⁎ −0.5735⁎⁎⁎ 0.4265⁎⁎ that the room could be improved on the production frontier of industry
Articles −0.1618 −0.2059 0.4265⁎⁎ that can also be interpreted as in the best practice technology. Further-
Beverage −0.6618⁎⁎⁎ −0.6471⁎⁎⁎ −0.2647
more, GHG efficiency is evaluated by stochastic production frontier
Chemical fiber −0.6177⁎⁎⁎ −0.6177⁎⁎⁎ 0.5882⁎⁎⁎
Chemical raw material and chemical −0.6324⁎⁎⁎ −0.6618⁎⁎⁎ 0.5882⁎⁎⁎ analysis and estimated by applying Greene's ‘true’ random effect
products model. The results show that there is little space to improve GHG effi-
Electronic equipment −0.07353 −0.1618 −0.6324⁎⁎⁎ ciency in fixed technology. This reflects that the new energy saving
Electrical machinery −0.6324⁎⁎⁎ −0.6471⁎⁎⁎
0.3529⁎⁎ and emission reduction technology should make new breakthroughs
Foods −0.6177⁎⁎⁎ −0.6471⁎⁎⁎
−0.2206
Furniture −0.6765⁎⁎⁎ 0.6618⁎⁎⁎
0.0147
and be applied in Chinses industry.
General purpose machinery −0.4706⁎⁎⁎ 0.8088⁎⁎⁎
−0.4706⁎⁎⁎ In addition, the results of impacts of GHG efficiency determinants in-
Leather 0.0147 −0.0441 0.1912 dicate three policy advises for GHG efficiency. First, using more grid elec-
Measuring instrument and machinery −0.3824⁎⁎ −0.3971⁎⁎
−0.0147 tricity instead of small-scale on-site coal-fired power plant in most
Medicines −0.5147⁎⁎⁎ −0.5147⁎⁎⁎
−0.0588
sectors in Chinese industry when it is impossible to generate electricity
Metal products −0.6471⁎⁎⁎ −0.6618⁎⁎⁎
0.4265⁎⁎
Non-metallic mineral products −0.6029⁎⁎⁎ −0.6177⁎⁎⁎
−0.3971⁎⁎ from waste heat or renewable energy sources. Then the lower the ratio
Paper −0.0735 −0.0735 0.1912 of the electricity purchase price to coal purchase price appropriately,
Special purpose machinery −0.6177⁎⁎⁎ −0.6029⁎⁎⁎ −0.4265⁎⁎ the higher the GHG efficiency is. Finally, enhancing the application of
Textile −0.4559⁎⁎ −0.4706⁎⁎⁎ −0.0147 some advanced technologies in industry can improve the GHG efficiency.
Textile wearing apparel −0.1029 −0.1324 0.0441
The impact of the China's Emission Trading System (CHN ETS) has a
Tobacco −0.2647 −0.2647 0.3235⁎
Transport equipment −0.6618⁎⁎⁎ −0.6618⁎⁎⁎ 0.8088⁎⁎⁎ moderate effect on GHG efficiency, while the results are unbelievable in
Non-ferrous metals −0.7794⁎⁎⁎ −0.8088⁎⁎⁎ 0.0441 most sectors. Also, the carbon trading value has a moderate effect in mi-
Printing −0.6324⁎⁎⁎ −0.6471⁎⁎⁎ 0.7794⁎⁎⁎ nority industry sectors.
Agricultural products −0.6471⁎⁎⁎ −0.6471⁎⁎⁎ 0.3971⁎⁎
The other purpose is to investigate the correlation between GHG ef-
Petroleum −0.3235⁎ −0.2941⁎ 0.2941⁎
Wood −0.5588⁎⁎⁎ −0.5882⁎⁎⁎ −0.1029
ficiency and three indexes of GHG intensity, energy intensity and energy
efficiency, which are common used in the sphere of learning and of pub-
⁎ Statistical significance at 10%.
⁎⁎ Statistical significance at 5%. lic. For example, there is a widespread assumption in energy statistic
⁎⁎⁎ Statistical significance at 1%. and econometrics that energy intensity and energy efficiency are equiv-
alent measures of energy performance of economies. GHG intensity, en-
ergy intensity and energy efficiency are dependent indexes for measure
efficiency cannot be suitable as the proxy to measure the greenhouse GHG and energy performance, but they cannot represent each other. For
gas emission with the progress of emission reduction technology. More- instance, the proxy of energy efficiency could not be used as a measure
over, that the different fuel has different compositions is another essen- of GHG efficiency. The same is true on other proxies.
tial reason, which is demonstrated by the correlation between GHG Finally, there is still a lot to be done in order to achieve the goal that
efficiency and energy intensity; in other words, the structures of energy China reduces the carbon intensity per unit of GDP by 60–65% by 2030
use have a significant impact on GHG emission. The negative correla- and how to pursue climate and policy to stimulate industry to invest
tions between GHG efficiency and energy intensity are expected, the av- in energy saving and emission reduction technology and ultimately
erage score of the correlations that are above statistical significance at lower carbon emission. Now the implementation time and coverage of
10% is 0.6641, which means medium correlation. As for the other unbe- the China's Emission Trading System (CHN ETS) are insufficient, and
lievable correlations which are under statistical significance at 10% may its effect is not obvious for GHG efficiency. For a more comprehensive
have other possible reasons like insufficient statistical data or others, the understanding of the GHG efficiency and effect of CHN ETS, it should
exact reasons are not clear. be left for the future when more data is available to us.
To sum up, GHG efficiency scores show the emission reduction po-
tential which means that there is room to improvement in energy-
saving and emission-reduction in Chinese industries, and the correla- Acknowledgements
tions between GHG efficiency and three indexes of GHG intensity, en-
ergy intensity and energy efficiency illustrate that there is medium The authors are grateful to the financial support provided by Na-
and strong correlation in most sectors. However, they cannot represent tional Key Research and Development Program of China
each other due to the individual but different impacts, like the previous (2017YFB0304000 & 2017YFB0304001).
study considered that energy intensity can only provide indirect and de-
layed evidence of technological and engineering energy efficiency Appendix A
(Proskuryakova and Kovalev, 2015). The impacts of GHG efficiency de-
terminants, including electricity proportion, electricity to coal, ETS, The detailed descriptions of GHG efficiency, GHG intensity, energy
transaction value and technical capacity are analyzed above. The CHN efficiency and energy intensity are depicted in Fig. A1. The blue lines
ETS and its transaction value are not statistically significant in most sec- represent energy efficiency. The red lines represent energy intensity.
tors. The analysis suffers to some degree from the CHN ETS trading pe- The green lines represent GHG efficiency. The black lines represent
riod (2013–2016) admittedly, which launched seven pilots in China GHG intensity.
from 2013, and now it is ready to turn to the whole country. Although The detailed descriptions of the correlations between GHG efficiency
we would like to get more accurate data from the monitoring system, and three determinants of ELE, EC and TC are depicted in Fig. A2. The red
they are not developed fully now. The volume of black carbon should scatter points represent the correlation for GHG efficiency with the price
be considered in further research because of the limitations of current ratios of electricity to coal (EC). The green scatter points represent the
technology. In any case, it is meaningful since the results discussed are correlation for GHG efficiency with the proportion of net electricity in
so crucial for some rules of GHG efficiency, and they are useful for policy the total energy used (ELE). The black scatter points represent the cor-
formulation. relation for GHG efficiency with technical capacity (TC).
1198 J. Sun et al. / Science of the Total Environment 690 (2019) 1190–1202
 J. Sun et al. / Science of the Total Environment 690 (2019) 1190–1202 1199

Fig. A1. the proxies of GHG efficiency, GHG intensity, Energy efficiency and Energy intensity in 26 sectors of China's industry, 2000–2016.
1200 J. Sun et al. / Science of the Total Environment 690 (2019) 1190–1202
 J. Sun et al. / Science of the Total Environment 690 (2019) 1190–1202 1201

Fig. A2. Correlations between GHG efficiency and three determinants of ELE, EC and TC.

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