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Increase Energy Efficiency
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The State Council executive meeting on Wednesday put forward a number of measures to cut the nation's energy consumption.

The meeting was held soon after the release of figures indicating high gross domestic product growth (GDP) in the first half of this year, signaling the central authorities' great concern about the energy situation as the economy maintains its strong growth momentum.

Although the concrete figures are not available to the public, it was revealed at the meeting that energy consumption growth exceeded that of GDP in the first half of this year and energy consumption per unit of GDP continued to rise.

The central leadership's worry is well justified now that the growth momentum of energy consumption remains strong even after the country set the goal of gradually reducing energy consumption by 2020.

As the first step, the country's 11th Five-Year Plan (2006-10) promised to ensure that overall consumption of energy per unit of GDP would be lowered by 20 percent within five years.

The goal for this year is to cut energy consumption per unit of GDP by 4 percent. It appears to be very hard for us to meet the target this year.

Admittedly, it is impossible to instantly stabilize high economic growth and energy consumption. But if the trends continue unchecked, it will be too late for us to act.

The fact that energy consumption outpaced GDP growth in the first half of the year indicates that we were not fully prepared when we drafted our new energy targets last year. What we do in the second half of the year and the years to come will determine whether we can achieve the goals set for this year and the 2006-10 period.

The State Council meeting wrote out several good prescriptions. These will help make up for the loss in the first six months if we can translate them into real action.

One is to promote energy-saving industries, such as the tertiary sector, and encourage enterprises to save energy.

It will take fairly long period of time to make that industrial shift. And it is hard to make enterprises save energy if they remain insensitive to energy prices. An energy price reform that links energy prices more closely with market demand must be put in place if we want that to work.

Another solution offered at the meeting is to include energy consumption indices into the appraisal system for government officials at all levels.

In this way, government officials would be forced to pay more attention to energy saving efforts in their localities. They now seem more interested in local GDP growth rather than energy or the environment, which have little impact on their political careers. The State Council needs to further define such rules to make it a truly applicable policy.

(China Daily July 21, 2006)

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