The NDRC announced on August 2, that energy efficiency (energy consumption per unit of GDP) improved by 3.35% in the first half of 2009 (compared with 2.88 percent in the first half of last year). China has set an aggressive target in its current 5 Year Plan to improve energy efficiency by 20% by 2010 (over 2005 levels). This program is often cited as the hallmark of China’s carbon mitigation efforts. Given China’s heavy reliance on coal to produce the energy it needs to feed its growing economy, there is no question that energy efficiency gains help to reduce the rate of growth in carbon emissions.
When added to the cumulative improvement from 2006-2008 of 10.08%, improvements from 2006 through the first half of 200 total 13.43% (leaving 6.57% to go over the next 18 months to meet the 2010 goal). 1
While the challenging economic conditions of the first half of the year played a role in the steep improvements in energy efficiency, it is important to understand why. Less economic activity will not (all other things being equal) effect energy efficiency numbers. Making less of something doesn’t mean you can make it more efficiently (indeed, the reverse is usually true). In any event, the Chinese economy never stopped growing. What happened, according to an article in Caijing was that there was a change in the mix of China’s industrial output.
Lin Boqiang, director of Xiamen University’s energy economics research center, said the decline in energy intensity, or consumption per unit of gross domestic product, was mostly due to a slump in output in several heavy industries.
Energy consumed in the power generation, petrochemical, coal and steel industries contracted in the first half as demand for their products evaporated amid the financial crisis.
Output didn’t decline as steeply in other, less energy-intensive sectors, which therefore had a larger influence in calculating energy intensity.
Light industry, which includes garment manufacturing and home appliance manufacturing, grew by 8.2 percent in the first half, compared with 6.6 percent for heavy industry, Li Xiaochao, spokesman of the National Bureau of Statistics, said in June.
That makes perfect sense, but I have to admit I’m somewhat puzzled because the NDRC reports that in the first half of 2009 energy intensity “in large industries fell, with the steel industry down 8.43 percent, the coal industry 3.83 percent, nonferrous metals 19.59 percent and power production 9.51 percent.” If these industries are outperforming the cumulative total, it suggests that other segments of the economy had significantly lower efficiency gains or even became more inefficient? Is there a rational explanation for this or is it simply statistics with Chinese characteristics? Explanations welcome.
Caijing cautions about getting too giddy over the strong improvement in H1 2009.
Lin noted that with all signs pointing to strong demand growth going into the second half, the government’s target of a 20 percent reduction in energy intensity by 2010, compared with 2006 levels, is becoming more unlikely.
“A reduction of 15 percent to 16 percent is more realistic,” Lin said.
First half figures for COD, SO2 emissions were also released (these will be directly influenced by business levels), and we will report on them later.
- Simply summing the yearly percentage changes is not appropriate, but it is how China usually reports the information. It would help if the reports provided “ton of coal equivalents” (tce)” per unit of GDP at the end of each given year, but it is hard to find this information. ↩
4 responses so far ↓
1 sustainablejohn // Aug 6, 2009 at 5:45 am
Aiya! This is the main issue. All they ever report is percentages, never actual numbers, so how can there be any oversight? This is the way they like it. Unfortunately I have tracked their numbers, and I only calculate 7.8% decrease in energy intensity from 2006-2008, using their data!
Charles, you can’t simply tack on the 3.35% to the 10.08%. Because 3.35% is year on year, from where they were at the end of H1 2008. So it’s probably more like 1-2% in absolute terms. Who knows though?
How bout GDP? Wow 7.1% year on year growth for H1 and yet power consumption continues to fall in Q1 (not sure about Q2) defying every other economic trend in history, where power consumption and GDP growth go hand in hand (they may grow at different rates, but it’s never one decreasing with the other increasing).
Be wary of this statement about large industries slashing energy intensity by 3% and 18% and whatever. Who knows what this means, it could be progress so far since 2006. I agree it is impossible if just for H1 2009.
Just one final point in how poor all these press releases/xinhua are and how they try and distort a story into something it’s not–see this on wind in H1 2009. http://news.xinhuanet.com/english/2009-08/02/content_11814332.htm WIND POWER CAPACITY DOUBLES IN H1 2009 omg really?? The article says “rose 11.81GW in the first half of this year” they meant “rose TO 11.81GW”. The figure is twice that of this time last year, but the headline is so misleading. Actually only 1 or 2GW were added in the first half. Is that all China? C’mon!
2 Environmental MediaWatch // Aug 6, 2009 at 3:38 pm
Thank you, Sustainable John, for a hearty laugh and welcome insight. Personally, I think it makes a lot of sense. Somewhere, somehow, I know it does. I know it does…I think it does, I am sure it must…
3 sustainablejohn // Aug 6, 2009 at 8:48 pm
Yes it must make sense, and I know the Chinese government has patience for people like me, especially Du Shaozhong of Beijing’s EPB. “Over the past 10 years, through our enormous hard work, Beijing’s air pollution has visibly improved. This is an indisputable fact. We have patience for that small group of people who don’t understand, and we believe that, as time passes, and in the face of facts, they will eventually understand.” http://www.nytimes.com/2008/01/10/world/asia/10china.html
Ah old favorites…
Well as for the confusion of the high energy industries…Xinhua…drumroll…reported incorrectly. If you head over to NDRC’s Xinwen Zhongxin (http://xwzx.ndrc.gov.cn/xwfb/t20090802_294442.htm) you’ll see that those are the numbers for energy consumption per unit added value for each sector, which is different from energy intensity. For energy intensity, we’re down 1.49% for coal fired power, 1.72% for steel, and a whopping 7.69% for cement (still slightly unbelievable but we’ll take it!)
4 cmcelwee // Aug 7, 2009 at 6:16 pm
@sustainablejohn: Oh Du Shaozhong he does bring back memories. Why it was just a year or so ago he was telling us we were really stupid for calling the air in Beijing smog when all it was a little good old fashion, natural “haze.” Too bad his own numbers didn’t support the “natural” conclusion. Thanks for clearing up some of the confusion surrounding the energy efficiency numbers. What got into cement?
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