| As reported in BP Statistical Review of World Energy. In 2010, China’s total energy consumption had reached 3.25 billion tons of standard coal. Comparing the second consumer US accounting for 19% of the global energy consumption, China had become the largest consumer accounting for 20.3% of the global energy consumption, and accounting for 75% of the increased part of global energy consumption. In addition, China’s CO2 emission had accounted for a quarter of the global emission, reached 8.33 billion tons, also more than 6.14 billion tons of US’s CO2 emission. Facing the energy supply constraint, excessive CO2 emission and international criticism, the 18 th National Congress of the Communist Party of China asked for making great efforts to promote ecological progress, and taking energy conservation and emission reduction as one of its new strategic priorities. It is worth to concern that, the performance of industrialization and urbanization in China causes the excessive energy consumption, and the energy consumption growth will last for a long time in future. The production makes the largest part of energy consumption and CO2 emission in China, and the production technology determines the level of energy utilization and CO2 emission performance, so the efficiency analysis refers to the production technology is the best method to measure energy utilization and CO2 emission performance. In this paper, we study the driving forces from relative variables derived from production technology such as technical efficiency change and technical progress, as well as how to allocate the CO2 emission in terms of production technology. This work is meaningful to establish the comprehensive evaluation system considering energy consumption, environmental damage and ecological benefits. The main research work and conclusions are as follows:(1) Studying the driving forces of industrial CO2 emissions based on improved production decomposition analysis(PDA) method. The traditional decomposition analysis focuses on analysis the impacts from economic scale, economic structure and energy(or CO2 emission) intensity, and neglects the impacts from relative variables derived from production technology. This paper embeds the efficiency indicators referred to environmental production technology into the traditional decomposition equation, and decomposes the environmental total factor productivity into the independent contribution from capital, labor, energy, desirable output and undesirable output based on Fisher ideal index decomposition method, supplement the traditional decomposition indicators such as technical efficiency and technical progress. We implement PDA to decompose CO2 emissions change of China’s 36 industries. The results show that: potential energy intensity yields more contribution on change of CO2 emissions than potential CO2 emission per energy consumption. Therefore, more adjustment space in energy intensity can be further explored. The contribution for improving environmental total factor productivity from labor is more than energy, and energy is more than capital.(2) Integrating PDA and IDA as IPDA to analyze the driving forces of regional CO2 emissions. PDA is advanced in analyzing the driving effects from the relative variables derived from production technology. IDA is advanced in aggregating the value of indicators from individual decomposition equation. IPDA can aggregate the value of indicators from individual PDA decomposition equation using method such as LMDI. We take this method to analyze China’s CO2 driving forces with the province-industry level(agriculture, industry, construction, transport and business industries on 29 provinces) panel data(1997-2011). The empirical results show that: In terms of CO2 emission reduction technology innovation, the reduction potential in eastern area is insufficient, and the reduction potential in middle and west area has not been released effectively, CO2 emission reduction technology progress is almost universal on all areas. In transportation sector, the structure-oriented emission reduction potential has been released through the optimization of energy consumption structure. Though the energy efficiency in industry improved obviously, industry’s potential for CO2 emission reduction from optimizing energy consumption structure is limited.(3) Proposing the centralized DEA method based on F?re environmental production technology and applying it to China’s regional CO2 emission allocation. The previous studies about CO2 emission regional allocation in terms of fairness criterion, lacks the researches focusing on efficiency analysis and analysis models based on the efficiency criterion to allocate CO2 emission. This paper develops spatial, temporal and spatial-temporal CO2 emission allocation models and dual models in terms of maximizing the desirable output. At empirical study stage, we take the province level data from 1995 to 2011, compare the optimal emission paths under three allocation strategies with actual emission path. A sensitivity analysis of optimal emission path on the change of emission control coefficient under spatial-temporal allocation strategy is further carried out. The results show that: The marginal abatement cost of CO2 emission for all DMUs will be equal to each other after optimization; There exists an inverted U-shape relationship between the aggregate optimal GDP and the emission control coefficient, which shows that modest emission reduction policy could be more appropriate for China to achieve the joint goals of economic development and CO2 emission reduction. Further, we explore an optimal allocation model for China’s CO2 emission based on centralized DEA refer to heterogeneous production technology, concerning differences on production technology level and total emission limitation. The results show that: Controlling total emission will cause the redundant CO2 emission in eastern area. Transferring the emission quotas from eastern to central and west areas is the working solution.(4) Proposing the centralized DEA method based on Kuosmanen environmental production technology and applying it to China’s industrial CO2 emission allocation. The traditional F?re environmental production technology is mainly based on constant returns to scale(CRS) condition. Under variable returns to scale(VRS) condition, Kuosmanen environmental production technology is minimum extrapolation set to satisfy the weak disposability and nulljointness assumptions. This paper proposes the centralized DEA model and dual model referred to Kuosmanen environmental production technology. The empirical study takes the province-industry level(agriculture, industry, construction, transport and business industries on 29 provinces) panel data(1995-2011), designs two scenarios that is controlling the single industrial CO2 emission fixedly and controlling the total CO2 emission from all industry fixedly, so as to search the optimal CO2 emission paths of province-industry level and nation-industry level. The results show that: Controlling the single industrial CO2 emission fixedly, the CO2 emission congestion happens in industry and construction sector, so the optimal strategy is that allocating the abundant CO2 emission from industry and construction sector to other sectors, which is in line with the emission quotas transferred by controlling the total CO2 emission from all industry fixedly. In general, in 1995-2011, the industrial sector need to reduce 1.36348 billion tons of CO2, accounting for 90.25% of the total CO2 emissions reduction, business sector can obtain 1.2393 billion tons of CO2, accounting for 82.03% of the total CO2 increased. Therefore, transferring the emission quotas from industry to business is the working solution.
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