Study On Environmental Efficiency And Market Segmentation Of China's Thermal Power Industry

China has overtaken the United States as the world's largest emitter of carbon dioxide and sulfur dioxide.High consumption and high emission not only face great pressure of international energy saving and emission reduction,but also threaten the sustainable development of China itself,which is more obvious for coal-based thermal power industry.Improving the environmental efficiency of thermal power industry is recognized as the most effective way to save energy and reduce emissions and achieve sustainable development.Chinese power industry dominated by State-owned Administrative Monopoly Enterprises faces a dilemma provoked by market-oriented reforms.Regional protectionism prevails so that those more efficient—but non-local—power generators cannot enter into the local market,causing significant market segmentation(MS)in the power industry.Eliminating market segmentation and improving environmental efficiency has become a subject worthy of close attention.In order to eliminate the regional technology heterogeneity in environmental efficiency measurement,this paper first constructs a meta-frontier slacks-based measure(SBM)model to study the environmental efficiency(EE)of China's 30 provincial thermal power industry from 2006 to 2015.Two polluting gases,carbon dioxide and sulfur dioxide,are taken as undesired outputs of the model in this paper.The results show that there is obvious regional heterogeneity in China's thermal power industry,and the technology gap between developed and backward areas is widening.In order to distinguish effective decision-making units(DMUs),the integration model of SBM-DDF and super-efficient SBM-DDF is constructed to study the environmental efficiency of China's thermal power industry.We find that the environmental efficiency level of China's thermal power industry generally shows an upward trend from 2006 to 2015,but there is still a lot of room for improvement.In further,this paper measures the market segmentation index of the power industry,and utilizes the random effect Tobit model,and then applies a counterfactual analysis to explore the impacts of MS on EE in the thermal power industry.The results show that the market segmentation index of most provinces showed a trend of “rising first and then decreasing” in 2005-2015.In addition,MS negatively affects EE performance both significantly and robustly.Due to the influence of market segmentation,the environmental efficiency loss in China's thermal power industry is as high as 15% in 2010.Based on the above analysis,some suggestions are put forward to further improve the environmental efficiency and market segmentation of China's thermal power industry.First,implement differentiated environmental efficiency promotion policies for high-level areas and low-level areas,give full play to the advantages of high-level areas,form a regional demonstration benchmark,and promote the rapid improvement of environmental efficiency in low-level areas.Second,due to the regional technology heterogeneity in China's thermal power industry,the relevant government departments should establish a multilateral or bilateral regular trade mechanism to strengthen economic and technological exchanges between regions and reduce the technological differences among regions.Third,reduce local government intervention and break market segmentation.Central government need to change the market segmentation behavior of the local government starting from the system construction and incentive mechanism.