Did China's Economic Stimulus Cut Its Energy Consumption?

china coal plant energy efficiency photo


China's massive stimulus spending on the environment, to the tune of about US$30 billion -- appears to be having an effect. Reports AFP:

CHINA cut its average energy consumption by 3.53 per cent in the first half of 2009 from a year ago, helped by massive stimulus spending on green projects, the government said on Sunday.

The figure compared with a decline of 2.89 per cent in the first quarter of the year, the National Development and Reform Commission said in a statement on its website.

But is this improvement due to energy efficiency improvements, or to a decrease in demand?Not so clear. Xinhua reports
Analysts said slower growth in industrial output, as result of a slowing economy, helped lower the energy intensity. Energy consumption of the industrial sector accounts for more than 70 percent of the country's total.

But better efficiency seems to be playing a role too. Even as energy consumption declined, China's economic growth expanded faster in the second quarter, to 7.9 percent, after sinking to 6.1 percent in the first quarter.

That reflects a decrease in energy intensity, a measure of energy used per unit of GDP. Improving energy intensity will likely be the cornerstone of China's commitments at Copenhagen, rather than a fixed cap on carbon emissions.

Reduction in SO2 and COD
The commission also said it expected the country's sulfur dioxide emissions to fall 5 percent in the first half, and that the measurement of chemical oxygen demand (COD) to be down 2 percent.

All of these improvements however are short of the ones that China's government has mandated, which would reduce average energy consumption by 20 per cent from 2006 to 2010, and major pollutant emissions by 10 percent.

Still, the apparent reductions amidst economic growth are a refreshing reminder that China's energy and environmental planners are capable of combining ecological sustainability and development if they so choose.

What impact improvements in energy efficiency will really have on emissions of pollution and climate change gases remains to be seen, at least until the global economy rebounds, and China's demand for coal rises again.

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