Allocation Schemes and Efficiencies of China's Carbon and Sulfur Emissions

Abstract

The Chinese central government has adopted a nationwide administrative allocation policy to reduce carbon and sulfur emissions. Using the ZSG-DEA (Zero-Sum Gain Data Envelopment Analysis) approach, this paper evaluates and compares the emission efficiencies of China’s provincial CO2 and SO2, and provides a reallocation scheme. The results show that the administrative allocation leads to an increasing gap of provincial emissions-reduction ability; provinces with higher efficiencies have difficulty achieving their administrative targets, whereas provinces with lower efficiencies can more easily achieve their targets. Additionally, the administrative allocation scheme ignores the difference in efficiencies, whereas the ZSG allocation scheme of this paper emphasizes the Pareto optimality of economic, environmental, and energy factors while comprehensively considering fairness and efficiency.

Keywords: emissions allocation; efficiency; zsg-dea; Pareto optimality

JEL Classification: C61; C67; Q52