Intertemporal evolution and influencing determinants of environmental productivity in South Asia’s electric power sectors: technological heterogeneity perspective

The rapid development of power sector and rising electricity demand has various negative impacts on society and environment due to increased energy consumption and ecological degradation. It is necessary to improve environmental productivity of electric power industry to achieve low-carbon development and promote green transformation. Due to heterogeneous nature of production technologies in the power enterprises, common production frontier assumption leads to biased estimates. In this context, we adopted the meta-frontier global Malmquist–Luenberger index, which measures cross-country technological heterogeneity, to intertemporally evaluate environmental productivity of the electric power sectors in South Asia. The dynamic panel system generalized methods of moments model was utilized, which solves endogeneity and heteroskedasticity issues, to evaluate influencing determinants of environmental productivity and technological heterogeneity. Empirical results indicate that during 2000–2019 environmental productivity was jointly contributed by the innovation-effect and leading-effect, whereas the catchup-effect had an inhibitory impact. The technology leadership tends to shrink and widen in several countries. The economic development and environmental regulations have demonstrated a positive effect, whereas electricity access and carbon intensity revealed an inhibitory impact on environmental productivity. Economic development had a positive influence on technological heterogeneity while technology progress of energy utilization, electricity access, electricity intensity, and environmental regulations established a negative impact. We proposed country-specific strategies to improve environmental productivity including strengthening pioneer technologies focused on leadership demonstration, endorsing efficient power production practices, improving transmission and distribution infrastructure, enhancing affordable electricity production, promoting reasonable environmental regulations, encouraging innovation-driven technological development, and adopting low-carbon technologies and carbon trading mechanisms.