Life-cycle data envelopment analysis to measure efficiency and cost-effectiveness of environmental regulation in China's transport sector

The synergistic reduction of CO2 emissions and air pollutants is of great concerns in China’s transport sector environmental regulation. This study built up a life-cycle data envelopment analysis model to inclusively measure CO2 and PM2.5 management performance of China’s 30 provinces’ transport sectors during 2013–2017 using the atmospheric environmental efficiency (AEE). We showed that the PM2.5 efficiency improvement was the main driver of China’s AEE increase from 0.544 in 2013 to 0.649 in 2017. The west of China exhibited the fastest growth and led the AEE since 2014; the central region also increased its AEE by 14.6% in the study period, while the east showed a negligible AEE improvement. Furthermore, the results showed that strict environmental regulation in the transport sector may cost China’s economic growth. Hence, we suggest that CO2 management demands more regulatory attention, and that market-oriented regulatory mechanisms, such as integrating the transport sector into carbon and PM2.5 emission trading systems, is needed to lower cost and enhance AEE.