With the new law on energy conservation taking effect yesterday, China has put into legal practice a basic national policy underpinning its sustainable economic and social development.

Expectations are high. The new law has been enacted with a view to promoting energy conservation throughout the country. After three decades of fast but extensive economic growth, China is keenly aware of the urgency to enhance energy efficiency and protect the environment.

However, while the new law gives a vital legal boost to the national drive to cut energy intensity and pollutants, many other measures to encourage energy conservation have yet to be put into place.

If the new law is to work in the favor of those who are trying to make the most of limited energy resources, skewed incentives that abet irresponsible energy consumption must be nullified as soon as possible.

A new chapter on incentive measures has been one of the most important improvements that distinguish this energy conservation law from its predecessor adopted a decade ago.

Such an emphasis on incentives addresses legislators' concerns about the actual effect of the new law.

It is relatively easy to persuade consumers and producers to embrace the idea of going green. But it is another thing to push them into acts that back their words.

On one hand, high up-front costs often blind consumers to the greater cost-efficiency of energy-saving products in the long run. On the other hand, tight government control over key energy prices is in fact subsidizing drivers of oil-guzzling cars and enterprises that are dragging their feet on improving energy efficiency.

The new law provides some useful therapies like tax and fiscal support for promoting production and use of energy-saving products. These incentives should be widely extended to tilt the market in favor of energy-efficient options.

Meanwhile, legislators and policymakers should also give a long, hard look at those pricing policies that still go against the grain of the market. Such disincentives for energy conservation will not only fuel excessive consumption of certain energy resources but also undermine the overall national effort to raise energy efficiency.

The new law will hopefully boost the country's energy-saving drive if the authorities can fix skewed incentives in line with it.

(China Daily April 2, 2008)