Push for energy-efficient growth in China

As the world’s second largest economy, China’s continuous and concrete efforts to raise its energy efficiency are important not only for itself, but for the world.

That China has managed to cut energy consumption per unit of gross domestic product by 19.06 percent between 2006 and 2010 on the 2005 levels is a cause for both optimism and caution.

It is encouraging to see that the Chinese economy has been firing on all cylinders with improved efficiency in its overall use of energy during the past five years.

However, China’s energy-saving progress between 2006 and 2010 does not justify too much complacency among policymakers.

The fact is that China is about one percentage point shy of its own target of cutting energy intensity by 20 percent within five years. It means more challenges are ahead for further progress in energy conservation.

On the one hand, the faster-than-expected expansion of the Chinese economy has underscored the emphasis that many local governments still place on growth over other development concerns, including energy conservation.

If local officials cannot rapidly change their outlook, it is unlikely that the country will overshoot its energy-efficiency goal in pursuit of sustainable growth in the coming years.

On the other hand, the current achievement is largely because the country has picked the low-hanging fruit by shutting down outdated power plants and other energy-guzzling concerns. Chinese policymakers will find it difficult to reap more gains in energy efficiency from further such factory closures.

It was reported that the Chinese government plans to reduce energy intensity by 16 percent during the 12th Five-Year Plan (2011-2015) period.

This new target may not look ambitious to green advocates, who worry that it may offer an easy ride to local governments that have not paid enough attention to slashing their energy intensity.

However, it is a pragmatic one, since further increases in energy efficiency in the next five years will incur higher costs, putting a drag on economic development.

China’s fast urbanization and rising living standards mean the country’s appetite for energy will not peak any time soon. Last year, China consumed 3.25 billion tons of standard coal equivalent, up 5.9 percent from the year before.

In an era that is bidding a fond farewell to cheap oil forever, Chinese policymakers should realize that the country’s next growth story will not be defined by how fast it expands, but by how much energy it saves.

(China Daily, March 3)