China's Energy-Efficiency Drive Faces Big Political, Economic Challenges

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There is no question that there is room to slash energy use. China currently uses more than four times as much to generate a unit of output than the average Group of Seven developed country, the Asian Development Bank says. "From an engineering perspective, the targets are very easy to hit. There is nothing technologically preventing it," said Robert Watson, director of the international energy programme at the U.S.-based Natural Resources Defense Council.

More challenging will be giving all of China, from officials to builders, real incentives to sacrifice profits for efficiency. Policy makers acknowledge they have set themselves a tough target, but they are driven by worries that a growing reliance on imported oil makes the country's economy vulnerable, while burning domestic coal reserves is devastating its environment. A net exporter of oil until 1992, China now imports more than 40 percent of its needs. Acid rain falls in more than a third of the country and air pollution is linked to some 400,000 deaths a year.

Edicts handed down from Beijing are often ignored by grassroots officials, who mouth the leadership's slogans but carry on making money as rapidly as possible and as dirtily as suits them. "This goal is achievable... (but) at the local level enforcement is a problem for current energy-efficiency policy," said Yang Fuqiang, head of the Energy Foundation in Beijing.

"A lot of local environment protection officials still agree with the local finance officials who think that development is the most important thing," he added. Politicians preoccupied with social stability need to create around 9 million jobs a year to keep the growing population employed and manufacturing remains the base of the economy, much of it in such energy-thirsty sectors as steel and aluminium. Urban growth has also spurred the rise of a prosperous middle-class that is buying up appliances from air-conditioners to washing machines, and taking to the roads, encouraged by state price caps that keep gasoline costs among the lowest in Asia.

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http://www.alertnet.org/thenews/newsdesk/PEK158590.htm