To　scientifically　evaluate　the　environmental　efficiency　(EE)　of　economic　development,　this　study　develops　a　new　two-stage　network　structure　with　undesirable　intermediate　elements　to　describe　the　actual　production　process.　According　to　different　relationships　between　two　stages,　non-cooperative　and　cooperative　data　envelopment　analysis　(DEA)　measure　methods　are　constructed　to　evaluate　the　EE　of　decision-making　units　(DMUs).　An　EE　decomposition　model　is　then　proposed　as　the　second　goal　to　improve　the　coordination　efficiency　of　DMU.　Compared　to　conventional　DEA　methods,　these　EE　measure　methods　not　only　consider　the　internal　structure　of　DMUs　with　undesirable　intermediate　elements,　but　also　can　be　used　to　obtain　relatively　unique　and　fair　evaluation　results　for　achieving　different　decision　objectives.　An　empirical　study　on　the　Chinese　industrial　water　system　is　taken　as　an　example　to　illustrate　the　effectiveness　of　these　EE　measures.　The　results　show　that　non-cooperative　relationships　may　hinder　the　sustainable　development　of　the　economy　and　environment,　so　promoting　mutual　cooperation　between　two　stages　is　more　in　line　with　the　interests　of　decision　makers.　©　2018　Elsevier　Ltd