Abstract: As an important industrial region in western China, Sichuan has devoted to eliminating pollution challenges over years. It plays an important role in national economic development and supporting the joint development of "Belt and Road" and Yangtze River Economic Belt. In response to the requirement of building a green energy community in the "Belt and Road" region and ensuring the energy security of all countries, Sichuan has been actively promoting energy transformation, committed to the popularization of natural gas, and led the country in the development of green energy. We construct a cost function of different industrial pollutants and estimate the industrial environmental efficiency through stochastic frontier analysis based on the city level data from 2009 to 2016 in Sichuan province. Popularization of natural gas and adjustment for industrial structure is a proxy for the implementation of prevention from source and pollutants governance represents end-of-pipe environmental treatment. Based on this, we explore both effects of prevention from source and pollutants governance on industrial environment efficiency as well profit in enterprise production. Furthermore, we estimate the pollutants reduction potential and provide policy implications on environmental governance in western China. Specifically, the results from Tobit model indicates that popularization of natural gas significantly improves the regional industrial environmental efficiency, thus reducing industrial pollutants. However, adjustments aiming at industrial structural change are less effective in controlling environmental pollution from source. End-of-pile environmental treatment only reduces emissions of sulfur dioxide, while other pollutants are not well managed. From micro level, we find that firms located in regions with well-adjusted industrial structure tend to present higher profits and growth potential. Energy structural adjustment and end-of-pile pollution control have no significant impacts on firm performance, as production costs are not affected under both measures. During the period of "13th Five-Year Plan", Sichuan province achieved the goal to some extent, in controlling industrial SO₂ and industrial soot through end-of-pipe measurement. However, in terms of industrial structure adjustment from source, three industrial pollutants failed to achieve the expected optimal emission reduction target.

Key words: adjustment to industrial structure, end-of-pile governance, industrial environmental efficiency, corporate performance