4. Conclusions and policy implications
As the water shortage and industrial water pollution have posed great threat to sustainable water use in China, it is an urgent work to estimate the state of green use efficiency of industrial water (GUEIW), and provide some useful policy recommendations. Based on a global non-radial DDF model,this paper computes the GUEIWs for 30 provinces in China during 2004–2012 as well as its two decomposition indicators (i.e., the ECEIW and the ENEIW). We then compute the shadow prices of industrial water based on the dual model of DDF at the provincial level, and analyze the bias between the actual price and the shadow ones for each province.
The empirical results show that the GUEIW shows several fluctuations over the study period andmost provinces in China have not achieved performed efficiently in industrial water use. The ECEIW is the main contributor of the growth of GUEIW. Thus, the environmental protection in the process of industrial production deserves more attention. The eastern region of China enjoys better performance in the GUEIW and its two decomposition indicators than those in the central and western regions. Regarding the provincial heterogeneity, the provinces in the central region show the least internal gaps in the GUEIW, while those in the western region suffer the largest internal gaps. The shadow prices of industrial water are much higher than the actual ones in allthe provinces, and an appropriate increase of industrial water prices would result in obvious improvement of GUEIW.