Analysis of the environmental efficiency in China based on the DEA cross‐efficiency approach under different policy objectives

The existing studies on environmental efficiency evaluation generally have the problem of efficiency overestimation. To solve this problem, a new data envelopment analysis (DEA) cross‐efficiency approach with undesirable outputs is developed to evaluate environmental efficiency from the perspectives of both self‐evaluation and peer evaluation. Then, three new evaluation strategies, namely, economic development strategy, environmental protection strategy, and win–win strategy, are proposed to reflect the needs of decision makers under different policy objectives. The proposed cross‐efficiency approach with different evaluation strategies not only realizes the cross evaluation of environmental efficiency, but also guarantees the relative uniqueness of the optimal solution on the basis of the preferences of decision makers. Combining the metafrontier DEA approach and DEA window analysis, a new cross‐efficiency analytical framework is constructed to gradually analyse the influences of policy objectives, technology heterogeneity, and dynamic correlation on the environmental efficiency. Subsequently, the environmental efficiency of China's economic development during 2006–2015 is in‐depth analysed on the basis of the proposed analytical framework, and some interesting conclusions, and some useful suggestions are obtained.