A good start is crucial if we want to meet the country's target
of cutting energy intensity by 20 percent in five years. However, a
lack of progress in improving energy efficiency in the first half
of this year requires policy-makers to face the issue with a
greater sense of urgency.
Yesterday's State Council work conference on energy saving
offered a vital opportunity to take stock of how far the national
economy has actually shifted from its energy-consuming growth
model.
Being part of the national effort to fulfill the 11th Five-Year Plan (2006-10), the central
government has declared that energy consumption per unit of gross
domestic product (GDP) must be cut by 4 percent this year.
Sadly, while the Chinese economy performed almost superbly with
unexpectedly high growth and low inflation in the first half of
this year, it appears that the country will have great difficulty
in achieving its energy efficiency goal.
With energy consumption outpacing economic growth, the country's
energy efficiency has conceivably worsened.
There are surely many lessons that policy-makers should draw
from this bad beginning.
For instance, excessive fixed-asset investment growth across the
country demonstrated that local officials are still relying far too
heavily on extensive growth to secure local economic
development.
Besides more rhetoric, it is time for the central government to
rethink what policy and economic incentives are required. To ensure
local support for energy-saving measures, the central government
needs to make full use of its administrative, financial and
personnel power.
With less than six months to go this year, the central
government must pull out the stops to awaken local officials to the
severity of the issue.
By making this year's task a 4-percent cut in energy intensity,
exactly one-fifth of the five-year energy goal, policy-makers may
have hoped for a smooth start to deliver that grand ambition.
However, the fact that the Chinese economy continues to roar
ahead at the expense of energy efficiency implies that shaking off
this reliance on excessive growth may be harder than expected.
Theoretically, it is easier to increase energy efficiency
through technological progress and industrial restructuring from a
lower starting point. And that may partly explain the authorities'
previous confidence in achieving a 4-percent cut.
But the reality is that the country is still far from being able
to embrace a new growth pattern that is not only environmentally
friendly and sustainable but also more efficient in terms of energy
use.
(China Daily July 27, 2006)