Understanding the efficiency and evolution of China's Green Economy: A province-level analysis

Abstract

The efficiency level, evolution characteristics, and factors driving the green economy in all provinces and regions should be clarified to achieve high-quality economic development and meet China's “double carbon” target. This study conducted the Super-Effective Slack-Based Model considering unexpected outputs to evaluate province-level Green Economic Efficiency (GEE) analysis (including 30 provinces, autonomous regions, and municipalities directly under the Central Government) in China from 2005 to 2020. Moreover, the distribution and dynamic evolution trend of GEE development was estimated through Kernel density estimation. Besides, GEE and its factors (i.e., industrial structure rationalization [ISR], industrial structure advancement [ISA], and urbanization level [UL]) were examined using a Panel vector autoregressive model that was built in this study. As indicated by the result of this study, China's GEE level generally displayed a “U-shaped” development trend of declining, stabilizing, and then rising, whereas the overall efficiency level is low, where the national GEE average reached 0.6934. The regional GEE level exhibited a significant “ladder” distribution, with the highest level, the second level, and the lowest level in the east, the middle, and the west, respectively. The GEE level varied significantly with the province, and most of the levels were at a medium efficiency level. Notably, 60% of regions had medium efficiency in 2020. The levels of ISR, ISA, and UL play significant roles in boosting green economic growth. This study provides valuable insights into the drivers of green economic growth in China guiding policy decisions on achieving a sustainable and low-carbon economy. As China strives to fulfill its ambitious carbon reduction goals, the findings of this study highlight the significance of continuing to prioritize green economic development at the provincial level.