1. Introduction
Due to the enormous volume of global resource consumption, ecological problems have become an important issue for a shared future of the world. China is now at an accelerated stage of urbanization, with the rate reaching as high as 58.52% in 2017. It is estimated that by 2030, China’s urbanization rate will climb to 70.12% [
1], and by 2050, it will exceed 90% [
2]. The rapid urbanization in China plays an essential role in improving the Chinese people’s living standards and promoting China’s social development. However, several recent environmental issues appeared. The large-scale urbanization in China requires magnificent products, energy materials, and other natural resource inputs, resulting in huge waste streams and emissions such as CO
2. Since 2011, China has surpassed the United States to become the country with the largest energy consumption and carbon emissions in the world. The accompanying energy and ecological environment problems have seriously constrained the quality of China’s social and economic development, as well as its urbanization process. Currently, China’s economy has embraced the “new normal”, and the traditional linear industrial practice, characterized by high capital investments, massive resource consumption, and severe pollution, could no longer adapt to the domestic situation. Therefore, it is necessary to build up a conservation-minded society to ensure the persistent and healthy development of the economy.
Eco-efficiency (
EE) can effectively measure the relationship between economy, resources, environment, and development [
3]. Understanding eco-efficiency is of great practical significance for decision makers addressing and delivering sustainable socioeconomic development. Thus, improving
EE is the only path to promoting economic growth coordinated with development quality. It is no wonder that a critical question of whether the current urbanization process in China can improve
EE has been raised. Therefore, research on the relationship between urbanization and
EE is of practical significance for understanding and planning the development process of urbanization.
Urbanization brings the accumulation of human resources, capital, and technology, which can trigger higher, cleaner production technology and improvements in energy efficiency. At the same time, however, urbanization is accompanied by the excessive consumption of energy and resources, resulting in pollution emissions [
4]. The impacts of urbanization on
EE are complex, and different phases of urbanization may have different influence on
EE. As mentioned above, the relationships between urbanization and
EE have not been clarified. So what will the process of urbanization do to the
EE in China? Is it good or bad? To answer the questions, this paper intends to analyze the relationship between urbanization and
EE with an empirical approach.
Compared to what previous scholars have done, the marginal contributions are as follows: firstly, relatively few have explored how urbanization affects
EE. We focus on this research gap and empirically test the influence of urbanization on
EE and its mechanism. Secondly, the methods used in the existing literature to measure
EE mainly included traditional data envelopment analysis (DEA)-based radial and non-radial methods, which have drawbacks that may cause results to deviate from the norm [
5]. On the contrary, this paper selected the epsilon-based measure (EBM) DEA model with undesirable outputs to assess the ecological efficiency (
EE) of 30 provinces in China from 2008 to 2019. Then, the effects of urbanization on
EE were empirically analyzed by the Tobit model. Other possible factors, including the economic development level, technical progress level, and foreign direct investment were also discussed. Accurately understanding the development of
EE is the basis of working out a reasonable emission reduction plan, which has the significance of promoting the development of the green economy to make clear the factors affecting
EE.
The rest of the article is composed of the following parts:
Section 2 introduces the data and methodologies.
Section 3 presents the characteristics of
EE in China. In
Section 4, the Tobit method is applied to test the influence of urbanization on
EE in China, and
Section 5 summarizes the article and offers suggestions for improvements. The flowchart of the empirical research is shown in
Figure 1.
3. Calculation Results of EE
Significant variations existed in the
EE of different provinces in China (
Figure 3). As
Table 3 and
Figure 4 show, the
EEs of Beijing, Shanghai, and Fujian are above 1 throughout the research years, which means that these three provinces realize the coordinated development of economic growth with environmental protection. In the other nine provinces, namely Guangdong, Zhejiang, Jiangsu, Shaanxi, Hunan, Henan, Tianjin, Chongqing, and Hebei, the levels of
EE are relatively high, with their annual average
EE higher than the national average. The result indicates high resource conservation and environmental protection in these provinces. The
EE in the other 18 provinces is far lower than the whole country level. Those provinces should increase their investment in the field of resource utilization, environmental pollution control, and industrial structure adjustment to improve their
EE.
According to the regional differences, the annual mean
EE values of Eastern provinces range from 0.8022–0.8755, and those of the central, the western, and the northeastern range from 0.6005–0.6798, 0.5375–0.6113, and 0.4117–0.4677, respectively. Apparently, the comprehensive
EE level is as the following: the east is the highest, followed by the middle, the west, and the northeast is the lowest. Relying on capital, talent, and technological accumulation, the eastern region has paid attention to the introduction and development of resource conservation and environmental protection technologies, making remarkable achievements in energy-saving and emissions reduction [
37,
38]. With the national rise of central China in recent years, the central region has made use of regional advantages, developing heavy industry and actively constructing the energy industry base. Since the central location is adjacent to the east with frequent technical communication between them, the
EE level in the central region is higher than that of the western region. Due to the physical geography, the economic development is chronically slow in west China. The northeastern area belongs to one of the traditional industrial bases in China; thus, the development in industry in the region has characteristics of high consumption of fossil fuel and the difficulties of economic transformation over the past three decades, which affected the regional
EE.
4. Regression Analysis
4.1. Unit Root and Co-Integration Tests
In the positive analysis, considering the characteristics of panel data, the unit root test and co-integration were used to test the variables. This paper applied Levin, Lin, and Chu (LLC), Im, Pesaran, and Shin (IPS), Augmented Dickey Fuller(ADF)-Fisher, and Phillips and Perron(PP)-Fisher tests to examine the stationary properties of all the variables to avoid spurious regression. In
Table 4,
UL, (
UL) × 2,
DEL,
TPL, and
FDI refer to the urbanization level, the square value of the urbanization level, economic development level, technical progress level, and foreign direct investment. As
Table 4 suggests, all the variables are second-order stable, which means that we need to proceed with the co-integration test. We applied the Kao co-integration test to check for a long-run equilibrium relationship among the variables [
39]. The results showed that the
t-Statistic of Augmented Dickey-Fuller was significant at the 1% level, indicating an overwhelming evidence for co-integration between
EE,
UL,
UL × 2,
EDL,
TPL and
FDI. Thus, a co-integration relationship exists (
Table 5).
4.2. Tobit Test
After the above verifications, we conducted the Tobit regression analysis by applying Stata 15.0. The structural equation was given as follows:
In Equation (3), UL, (UL) × 2, DEL, TPL, and FDI refer to the urbanization level, the square value of the urbanization level, economic development level, technical progress level, and foreign direct investment, respectively; ε is the stochastic disturbance item.
The parameter estimation results by the Tobit model are listed in
Table 6. The results show that each variable has a different influence on
EE. The results show that the urbanization level, economic development level, technical progress level, and foreign direct investments have passed the significance test at the 1% level, meaning that there is a 99% probability that these variables have a significant influence on the
EE. The detailed analysis of each explanatory variable is as follows.
The parameter estimation value of the urbanization level, and the urbanization level × 2 registers −2.713, and 1.853, respectively, suggesting that the functional relationship between urbanization and EE may be inverted U-shaped. The cause behind this phenomenon may be China’s pursuit of a proactive fiscal policy and an expanded urbanization strategy in response to the 2008 outbreak of the world economic crisis, which presupposed massive infrastructure and housing and accelerated overall energy consumption. At the same time, massive population migration from rural areas to urban cities generated energy consumption and pollution emissions, which destroyed the construction of the ecological economy, and the EE declined. In the current stage, urbanization has negative impacts on EE. However, this relationship would not last forever. Since the 18th CPC National Congress in 2012, China has accelerated the construction of Ecological Civilization and has made a pledge to transform urbanization and economic development models. Therefore, a new type of urbanization strategy has been implemented. On the other hand, the improvement of urbanization can bring the cluster effect of human capital and the spillover effect of advanced production technologies to cities. As a result, the process of urbanization not only brings about enormous economic growth, but also the development and application of clean production technology; therefore, the impact of urbanization on EE would transform into a positive correlation for the future.
As for the control variables, the regression coefficient of the economic development level shows a significantly positive correlation. At present, China is the second largest economy in the world, which can provide substantial financial support for the transformation and the upgrading of industries. The advantages guarantee the development of production technology, promising a positive impact on the
EE in China. The estimated coefficients of technological progress level are positive, exceeding 1%. This result further verifies that the “innovation drive” is the key to China’s economic transformation, and technological progress can bring about the improvement of production, environmental protection technology, and efficiency, which is the key to creating a good development environment for new urbanization. Foreign direct investments play a significant role in promoting
EE. At one level, the increase in foreign direct investment promotes growth and creates output value and more regional job opportunities. In addition, technology spillovers and demonstration effects ultimately improve
EE [
40].
5. Conclusions and Policy Suggestions
The rapid urbanization and continuous economic growth in China are accompanied by new environmental issues [
41]. This paper used the panel data of 30 provinces in China from 2008 to 2019, and comprehensively used the DEA method, the Tobit method, and ArcGIS Geographic Information analytical methods to analyze the impact of urbanization on
EE. Major findings are summarized as follows: firstly, the eastern region has the highest rate of
EE, followed by the central and western regions, and the northeast region remains the lowest. Secondly, the
EE of Beijing, Shanghai, and Fujian were at the production frontier surface with a high level during the study period. The
EE of Gansu, Ningxia, and Xinjiang were generally at a low level. A regional mechanism of energy-saving and emissions reduction should be built to reduce regional differences [
42]. Thirdly, the effects of urbanization on
EE in China present a U-shaped relationship, having a negative relation first and then reversing to a positive one. At present, the process of urbanization shows negative impacts on the
EE, while the turning point is yet to come. As for the control variables, the economic development level, technological progress, and foreign direct investments have positive impacts on
EE.
Based on the results of the empirical study, several policy suggestions may be proposed: (1) the local governments should take diversified roads of high-quality urbanization according to the local conditions. The eastern region has advanced production technology, management, and rich capital, so it should adopt the most radical model of a new-type urbanization strategy. The central and western regions are extremely rich in various natural and tourism resources, such as minerals, energy, water power, wind power, and geothermal heat, etc. With the implementation of new-type urbanization, they can cultivate an economy with characteristics and make the best use of the comparative advantages. (2) The process of urbanization should take account of the effective utilization of resources and energy. The government should accelerate reforms of natural resource commodity pricing based on the degree of scarcity, and encourage and support the development of a recycling economy to promote renewable resources recovery and utilization. The government should also introduce tax preferences to encourage firms to upgrade their production technology and apply clean production technologies. (3) It is also wise to strengthen environmental protection regulations when attracting foreign investment to avoid importing high pollution and high energy consumption industries. In the future, to boost economic development, high-tech industries, environmentally friendly industries, and producer services industries will undoubtedly be welcomed in China.