Keywords: rapid industrialisation, energy consumption, total factor energy efficiency, TFEE, China, industrial added value, urbanisation, energy prices, technological change
Rapid industrialisation and energy efficiency in China: 1995–2010
This paper re–examines the energy efficiency and its determinants in China during its rapid industrialisation from a total–factor framework by incorporating the environmental impacts of energy consumption and using several alternative models approached by Mukherjee (2008a, 2008b). With the panel data of 29 provinces for the year 1995–2010, the study compares the total–factor energy efficiency across provinces, based on several models. The results demonstrate that Shanghai, Guangdong, Fujian, and Hainan perform the best in terms of efficiency of energy utilisation, whereas Shanxi, Guizhou, Gansu, Qinghai, Ningxia, and Xinjiang are the worst performers. Tobit regression analysis reveals that provinces with a greater share of industrial added value in their GDP, or with a larger level of urbanisation, have lower energy efficiency. And a province with more marked technological advancement usually associates with higher energy efficiency. Besides, energy price is linked to the efficiency of energy consumption, but its effect on efficiency is far less than that of technological changes.