Research on environmental efficiency and TFP of Beijing areas under the constraint of energy-saving and emission reduction

Abstract In recent years, economy grows rapidly in China but it also pays a huge cost of destroy of resources and environment, and energy-saving and emission reduction has become a hot topic. This paper aims at calculating the environmental efficiency and environmental total factor productivity (TFP) of Beijing under the constraint of energy-saving and emission reduction to explore the relationship of the city’s economy and environment. We used an improved directional distance function – Biennial Directional Distance Function (BDDF) and Luenberger (L) productivity index which is corresponding to BDDF. This method can decompose the efficiency and productivity according to input and output factors and solve the problem of infeasible solution. The study found that the environmental efficiency of Beijing is different from regions and it takes on a concave distribution from the urban center to the edge of the city. Energy inputs and environmental pollution are the main influence factors of environmental inefficiency. The environmental TFP of the two central regions is higher than the two fringe regions, and through the decomposition results, we learned that the technology progress and the energy-saving emission reduction are the core of productivity growth momentum. From the change trend, the environmental efficiency of Beijing reached a high level in 2011 and followed by a slow decline. Whereas environmental TFP showed a tortuous rise trend which is down to the lowest in 2011–2012 and up to the highest in 2015. Based on our conclusions, we can say that energy-saving and emission reduction work of Beijing has made some good achievements, but with the difficulties increase we should take more reasonable measures according to the actual situation and join together to make the results of energy-saving and emission reduction work more effective.