Research on energy directed technical change in China's industry and its optimization of energy consumption pattern

Crucial to the green and sustainable development of China's industry are both choosing an appropriate path of directed technical change and optimizing and improving energy consumption pattern. In this paper we incorporate fossil energy, non-fossil energy and environmental factors into the traditional production function and calculate the factor output elasticity, the growth rate of environmental total factor productivity, the factor-biased degree of directed technical change and factor substitution elasticity in China's industrial sector based on stochastic frontier analysis of the transcendental logarithmic production function. The results show that the high output elasticity of capital leads to the highest factor-biased degree of directed technical change of capital although it is accompanied by an increase in energy consumption and environmental degradation. At present, the factor-biased degrees of directed technical change in China's industry, from high to low, are capital, the environment, fossil energy, labor and non-fossil energy; these can be seen as the root cause of, among other things, overcapacity, energy shortages and environmental pollution. Optimizing the path of directed technical change of labor, capital and non-fossil energy is an advisable way to solve the above problems. The patterns of energy consumption in industrial production in most provinces are unsustainable and each province should optimize its local energy consumption pattern according to those technical changes biased towards non-fossil energy and the positive factor substitution relationship between two kinds of energy.