Emission Reduction and Energy Performance Improvement with Different Regional Treatment Intensity in China

China's industrial sector, which has a significant position in the world, is the main sector of China's energy consumption and waste gas emission. China's government has promulgated a Guiding Opinion, setting key regions to establish an emission reduction target of air pollutants during the 12th five year plan (2011-2015). Thus, there is a different regional treatment of industrial waste gas in China. This study considers the waste gas treatment expenditure as a new input and employs the non-radial directional distance function in the framework of the meta-frontier model to investigate the energy and emission reduction performance of China's industrial sectors. The study is aimed at finding a significant and expanded technical gap between key and non-key regions in the energy and emission reduction efficiencies. The empirical result presents an effective method to improve the performance by increasing the emission treatment expenditure to reduce emissions.