China on the path to efficient use of energy

BEIJING - China aims to curb its energy consumption for each unit of industrial output by 21 percent during the period of the 12th Five-Year Plan (2011-15), the Ministry of Industry and Information Technology said on Monday.

The new target is an effective way to guarantee the realization of the goal of cutting energy use for each unit of growth domestic product (a ratio known as energy intensity) by 16 percent during the same period, said researchers.

"The new target is relatively aggressive," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.

Energy consumption in the industrial sector accounts for about 70 percent of the nation's total use, so the target "bodes well" for China's goals, Lin said.

China aims to save the equivalent of 670 million tons of standard coal during the five-year period under a plan for industrial energy conservation posted on the ministry website on Monday.

The plan also calls for the closure of inefficient companies in more than 10 industries, including electrolytic aluminum, because of overcapacity, high energy consumption and pollution.

"By the end of 2015, high emissions industries such as steel, non-ferrous metals ... and electronic components all need to reduce their energy consumption by about 20 percent," the ministry said in a statement.

Apart from closing excess capacity, the government will promote energy conservation and emission reductions.

The country will further raise the thresholds for industry access and strictly control the growth of smokestack industries.

Also, the government will encourage the cooperation of domestic and overseas companies in the field of energy saving and introduce more foreign technology.

A report released by the World Bank on Monday also had a width of advice for China to advance the "going green" development agenda.

China's rapid growth in the past 30 years has resulted in high emissions and environmental destruction, showing that the traditional mode of development is no longer feasible, said the report. It said that the concept of green development represented a new approach to sustainable growth.

"For China to advance the 'going green' development agenda, it will need to look at long-term market incentives to encourage enterprises and households" to pursue this path, the World Bank said in its report.

The most urgent reform involves the pricing mechanism for resources such as coal, gas and water to provide the basic market conditions for green development.

However, Lin said that pricing reform for resources faced many near-term difficulties in China for "complicated reasons" such as the impact on consumers.

The World Bank also urged China to accelerate the establishment of a market-based mechanism to reduce emissions and spur innovation in green technology.

That means more public investment and the better design and enforcement of regulations to complement market incentives, such as taxes, fees, tradable permits and quotas, and eco-labeling, said the World Bank.

The "Chinese leadership has already shown its commitment to green, low carbon development, even though it is at the early stages of a long journey," it said.

The report also warned the less-developed regions, which are undergoing a period of heavy industrialization, to avoid the costs of being locked into a high carbon pathway.