China Aims to Build Energy-Efficient Society in Next Five Years

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The Chinese government has included a goal of building an energy-efficient, less resource-intensive society in a new proposal that feeds into the 11^th Five-Year Plan of 2006-2010. The proposal, adopted at the October 11 meeting of the Communist Party Central Committee, will play a critical role in shaping the country's development in the coming decades. At a time when China's economic future is at a crossroads, energy and environment concerns now top the national agenda.

Recent economic growth in China has been characterized by high inputs, high consumption, and low outputs. But the unprecedented boom in GDP has come at a cost, with the country's annual natural resource consumption doubling in the last 25 years. China generated only 4 percent of the gross world product over this period, but accounted for 30 percent of global steel use, 31 percent of coal, 20 percent of aluminum, and 40 percent of cement. International energy institutions have predicted that more than one-fifth of increased global demand for energy resources between 2002 and 2030 will come from China. The new national energy-efficiency goal reflects concerns among China's leadership that the country will not be able to sustain its economic growth without more-efficient resource use.

Achieving this target will require changes in China's construction sector, a key energy-consumptive sector in the country. According to the Ministry of Construction, buildings and construction account for roughly half of all domestic energy use. Ninety-five percent of China's buildings are “highly energy-consuming,” with consumption per unit of area 2-3 times that of industrial countries. To address this concern, the government has set an ambitious goal of transforming all existing buildings into energy-saving buildings by 2020, the Vice Minister of Construction announced in February. In addition to establishing national green building standards, China is requiring that all buildings built after 2005 incorporate technologies that could save up to 65 percent more energy per square meter—including natural ventilation, natural lighting, water recycling, and large-scale application of renewable energy systems. However, significant obstacles remain, including patchy energy-conservation laws and policies, the lack of market incentive mechanisms, higher costs, and the absence of a widespread energy-saving ethic.

Transportation is a second key energy-consumptive sector, accounting for as much as one-third of Chinese oil use. In an effort to save energy and cut oil dependence, the government has established a series of new vehicle regulations and has been active in the research and development of alternative fuels. According to Michael Wang at the Argonne National Laboratory in Illinois, China's new Vehicle Tax Policy imposes a levee of 1 percent on smaller-engine vehicles, but up to 20 percent on larger-engine vehicles, to discourage their use. Meanwhile, in the 11^th Five-Year Plan, the government states that China will step up efforts to research and develop advanced vehicle technologies, such as hybrid electric and fuel cell. Foreign investment has driven the domestic hybrid market as well: in early September, Volkswagen announced that it would develop, assemble, and sell a gasoline-electric hybrid minivan, which it hopes to market during the Beijing Olympics in 2008.

All these initiatives point to a recognition that China will not be able to sustain its economic growth if it continues to approach U.S. levels of consumption. For example, to achieve the average oil consumption of the United States, China would need to use 90 million barrels daily—11 million more than the entire world produced each day in 2001, Worldwatch Senior Researcher Janet Sawin reported in State of the World 2004. With global energy markets now at a “tipping point,” China's ambitious goal of building an energy-efficient society in the next five years has attracted global attention. To truly achieve this level of sustainable development, however, the country must translate this goal into even greater action.