Efficiency of the Chinese Cement Industry: History
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hongxing tu
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Wei Dai
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China’s cement production has been the highest in the world, but the extensive development model, which has been formed for a long time, has brought serious damage to the natural environment. The overall environmental efficiency of China’s cement industry is low, and there is still much room for improvement. Moreover, there are serious imbalances from very low to very high between different regions.

  • environmental efficiency
  • efficiency loss
  • DDF

1. Introduction

The cement industry is closely related to the development of the national economy, production and construction, and people’s life, and its output value accounts for 40% of the building materials industry. China’s cement industry has a history of nearly one hundred years, and especially in the past 10 years, with a rapid development momentum and the output ranking of first in the world for many years. However, as a traditional industrial sector, the cement manufacturing industry has the typical characteristics of high energy consumption, high emissions, and resource dependence, which inevitably brings a series of environmental pollution problems. According to incomplete statistics, the dust (smoke) emitted by China’s cement manufacturing industry accounts for 39% of the total industrial dust emissions in China, and the dust (smoke) emitted per unit land area is 8.45 times the world average, ranking first in industrial dust emissions [1]. In terms of air pollution control, the cement manufacturing industry has become the third major monitoring object next to thermal power and transportation. In addition, PM2.5 accounts for more than 80% of the dust emissions of China’s cement manufacturing industry, and the emission of NOx accounts for about 10–12% of the total amount of the country, which has become an important driver of hazy weather. In reality, the pollution emissions of China’s cement manufacturing industry are seriously exceeding the standard. It is urgent for the state to formulate relevant regulatory measures to guide the healthy and sustainable development of the cement industry.

2. Environmental Efficiency of Chinese Cement Industry

Environmental efficiency is an important indicator to describe the coordinated development of energy, environment, and economy. It has always been a hot topic in academia and for policymakers. Many scholars use different methods to study energy and environmental efficiency from different perspectives. Their research methods mainly include the parametric method and the nonparametric method, but the nonparametric method is more common. For example, Rehman’s research team has used the parameter analysis method to study the complex relationship between regional energy, economy, and environment, and has achieved fruitful research results [2][3][4][5][6][7]. However, because the nonparametric DEA method does not need to know the specific form of the production frontier and has great flexibility, more and more researchers apply it to environmental efficiency evaluation. Different from the traditional concept of technical efficiency, environmental efficiency is an efficiency evaluation system based on environmental technology. It is a technical efficiency considering environmental pollution factors. In the process of industrial production, when the input of resource factors is certain, its output shows two distinct forms: one is normal output, that is, industrial economic growth and social welfare increase; the other is abnormal output, which shows various pollution emissions in the process of industrial production, and this abnormal output is nonremovable. Because two different forms of output show the reverse change relationship of one increase and one decrease, the evaluation of environmental efficiency becomes extremely complex. The simple ratio analysis method and the traditional DEA model are no longer applicable. It was not until Chambers and Chung et al. (1996) proposed the directional distance function based on the traditional Shepard output distance function that the problem of environmental efficiency evaluation under environmental governance was reasonably solved [8]. Since then, this nonparametric method has been widely used by scholars such as Chou (2013), Li (2013), and Song (2015) to study the coordinated development of the energy economy environment (3E) in China [9][10][11].
As a traditional industrial sector, the cement manufacturing industry has obvious production process characteristics of high energy consumption, high emissions, and resource dependence, which will inevitably bring a series of environmental pollution problems. Unfortunately, the existing research literature rarely involves the environmental efficiency of the cement industry. For example, Oggioni et al. [12] analyzed the eco-efficiency of 21 prototypes of the cement industry using a DDF approach. Riccardi et al. [13] assessed the efficiency of the high energetic and CO2 emission-intensive cement production processes in 21 countries using the distance function and the directional distance function. Long et al. [14] investigated the total factor productivity eco-efficiency and the determinants of Malmquist in China’s cement manufacturers. Zhang et al. [15] analyzed the environmental efficiency of China’s listed cement companies using a non-radical DEA model with a slacks-based measure. The above research focuses more on the macro level to explore the 3E problem of the cement industry. The Chinese government has always adhered to the binding indicators of resource conservation and environmental protection for many years. What is the effect of government regulation policies? What impact does it have on the environmental performance of China’s cement industry? What differences are there between different regions? Existing studies cannot answer these questions. Enterprise organizations are the subject of national environmental supervision and the executor of regulatory policies. Only by analyzing the environmental efficiency of the cement manufacturing industry from the industry and enterprise level can researchers accurately answer the above questions.

3. Policy Implication

Formulating regulatory policies according to regional differences will be more conducive to the win–win development of China’s cement industry. The eastern region, which is sensitive to environmental regulation, can consider carefully relaxing the regulation policy to reduce the negative impact of regulation on output, and strengthen environmental supervision and law enforcement to prevent opportunism. For the central and western regions that are not sensitive to regulation response, it is more appropriate to take steadily strengthened environmental regulation measures, forcing cement enterprises in this region to actively carry out technological innovation to reduce pollutant emissions.
Due to the influence of many subjective and objective factors, this research still has identified a number of limitations, which need to be further explored in the follow-up research. Firstly, the current statistical data specifically for the cement manufacturing industry are not comprehensive and the quality is not high, so it is difficult to obtain the statistical data of enterprises below the scale. Secondly, although based on the existing research, researchers extended from the macroeconomic level to the mesoeconomic level, integrating the material flow analysis at the industrial technology level, and the value flow analysis at the economic level, and so evaluating and analyzing the micro effect will be an important research topic in the future. Thirdly, researchers selected sample data from 2004 to 2016, and the research conclusion only represents the basic situation of China’s cement industry’s environmental efficiency during this period. It is also necessary to investigate the changes of the cement industry’s environmental efficiency from a dynamic perspective according to China’s economic development track, which will be the next direction worthy of research.

This entry is adapted from the peer-reviewed paper 10.3390/en15093396

References

  1. Gao, C.M. Discussion on environmental cost externalization of China’s cement industry. Cem. Eng. 2016, 29, 1–2. (In Chinese)
  2. Rehman, A.; Ma, H.; Ozturk, I. Do industrialization, energy importations, and economic progress influence carbon emission in Pakistan. Environ. Sci. Pollut. Res. 2021, 28, 45840–45852.
  3. Rehman, A.; Ma, H.; Radulescu, M.; Sinisi, C.I.; Yousaf, Z. Energy Crisis in Pakistan and Economic Progress: Decoupling the Impact of Coal Energy Consumption in Power and Brick Kilns. Mathematics 2021, 9, 2083.
  4. Hussain, I.; Rehman, A. Exploring the dynamic interaction of CO2 emission on population growth, foreign investment, and renewable energy by employing ARDL bounds testing approach. Environ. Sci. Pollut. Res. 2021, 28, 39387–39397.
  5. Rehman, A.; Ma, H.; Chishti, M.Z.; Ozturk, I.; Irfan, M.; Ahmad, M. Asymmetric investigation to track the effect of urbanization, energy utilization, fossil fuel energy and CO2 emission on economic efficiency in China: Another outlook. Environ. Sci. Pollut. Res. 2021, 28, 17319–17330.
  6. Khan, K.; Babar, S.F.; Oryani, B.; Dagar, V.; Rehman, A.; Zakari, A.; Khan, M.O. Role of financial development, environmental-related technologies, research and development, energy intensity, natural resource depletion, and temperature in sustainable environment in Canada. Environ. Sci. Pollut. Res. 2022, 29, 622–638.
  7. Rehman, A.; Radulescu, M.; Ma, H.; Dagar, V.; Hussain, I.; Khan, M.K. The Impact of Globalization, Energy Use, and Trade on Ecological Footprint in Pakistan: Does Environmental Sustainability Exist? Energies 2021, 14, 5234.
  8. Chambers, R.; Chung, Y.; Färe, R. Benefit and Distance Function. J. Econ. Theory 1996, 70, 407–419.
  9. Chou, Y.; Xing, X.; Fang, K.; Liang, D.; Xu, C. Environmental efficiency analysis of power industry in China based on an entropy SBM model. Energy Policy 2013, 57, 68–75.
  10. Li, H.; Fang, K.; Yang, W.; Wang, D.; Hong, X. Regional environmental efficiency evaluation in China: Analysis based on the Super-SBM model with undesirable outputs. Math. Comput. Model. 2013, 58, 1018–1031.
  11. Song, X.; Hao, Y.; Zhu, X. Analysis of the environmental efficiency of the Chinese transportation sector using an undesirable output slacks-based measure data envelopment analysis model. Sustainability 2015, 7, 9187–9206.
  12. Oggioni, G.; Riccardi, R.; Toninelli, R. Eco-effificiency of the world cement industry: A data envelopment analysis. Energy Policy 2011, 39, 2842–2854.
  13. Riccardi, R.; Oggioni, G.; Toninelli, R. Effificiency analysis of world cement industry in presence of undesirable output: Application of data envelopment analysis and directional distance function. Energy Policy 2012, 44, 140–152.
  14. Long, X.; Zhao, X.; Cheng, F. The comparison analysis of total factor productivity and eco-effificiency in China’s cement manufactures. Energy Policy 2015, 81, 61–66.
  15. Zhang, F.; Fang, H.; Wu, J.; Ward, D. Environmental Efficiency Analysis of Listed Cement Enterprises in China. Sustainability 2016, 8, 453.
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