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The Ecological Efficiency of the Coal Industry Based on PCA and DEA Modeling

CHENG Xiaojuan 1,2 ,HAN Qinglan 1 ,QUAN Chunguang 3 (1. School of Businesses,Central South University,Changsha 410083 ,China; 2. Dept of Industrial Engineering,Hunan University of Science and Technology,Xiangtan 411201 ,China; 3. Dept of Business,Changsha University,Changsha 410003 ,China)  
When there is a strong correlation between input and output variables in a data envelopment analysis(DEA)model,the accuracy of evaluation results is influenced. Here,we address this deficiency in the DEA model by combining it with principal component analysis to evaluate the eco-efficiency of China’s coal industry. We review ecological efficiency and lessons learnt from Germany and build an ecological efficiency evaluation index system for the Chinese coal industry from 2002 to 2010,comprising input and output indicators. The results show that there only two years (2003 and 2010) reaching a relatively effective DEA for China’s coal industry,indicating that input and output factors of technical and scale efficiency for these two years have been in the best condition. The remaining eight years were in an inefficient state to varying degrees,including five years achieving pure technical efficiency and effective,and three years of pure technical and scale efficiency. Pure technical efficiency was larger than scale efficiency over the 10 years and indicates that the main problem with China’s coal industry has been the invalid scale. We conclude by discussing scale invalidity in China and suggest countermeasures involving coal industry structural adjustment and circular economic development to improve ecological efficiency of the coal industry.
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