More stimulus needed for energy conservation in China

The report, undertaken in cooperation with the Development Research Center of China’s State Council, shows that China's stimulus package has bolstered economic growth mainly through investments in infrastructures, increasing demand for energy-intensive industries and pushing up China’s energy consumption in 2009-2010. It is estimated, however, that the stimulus will have long terms benefits for energy conservation.

In November 2008, the State Council (China’s highest decision-making body) decided to invest four trillion RMB – approximately 586 billion US dollars – to bolster the country’s economy from the global financial crisis. As in March China’s National Congress will adopt the 12th Five-Year Plan, the main policy tool driving economic and social development in China, this study offers an important reference on how to direct future investments.

The report recommends that China increase investments in energy conservation, including stricter approval standards for energy-intensive projects and disincentives for those using inefficient technologies. China also needs to take full advantage of the country’s renewable energy potential and upgrade the energy grids.

Carbon footprint accounts for 54% of China’s total ecological footprint, according to a WWF report published in November 2010, so promoting a low-carbon economy will be crucial for China’s environmental sustainability.