China's efforts to reduce energy consumption and emissions nationwide have achieved great results so far. According to information jointly released by the National Bureau of Statistics and the National Development and Reform Commission (NDRC) on August 7, nationwide energy consumption per unit of GDP (tons of standard coal per 10,000 yuan, or $1,457.73, of GDP) dropped 2.88 percent in the first half of 2008 compared with the same period last year, continuing the trend in decreasing energy use.

In early 2006, the Chinese Government decided that by 2010, the country's energy consumption per unit of GDP should be reduced by 20 percent compared with 2005 and that emissions of major pollutants should be reduced by 10 percent. To achieve these goals, it adopted a series of measures starting in the second half of 2006, including the closure of small coal mines and small thermal power plants. The measures began to produce effects in 2007 when nationwide energy consumption per unit of GDP dropped 3.27 percent from the previous year. Also, both the emissions of carbon dioxide and chemical oxygen demand (COD) fell for the first time during this period, dropping to 4.66 percent and 3.14 percent, respectively, year on year.

At a working conference on August 6 in Beijing, Xie Zhenhua, Vice Minister of the NDRC, said that the trend of decreasing energy consumption per unit of GDP was in line with stronger efforts by government departments to conserve energy and reduce emissions.

Xie said that in the first half of this year, the NDRC, along with the Ministry of Supervision and other government departments, completed an assessment of the implementation of energy conservation measures at nearly 1,000 key state enterprises. The companies, located in 30 provinces, autonomous regions and municipalities, are major energy consumers, and the assessment was aimed at urging them to further reform their energy conservation measures.

This year, the Central Government also set aside 14.8 billion yuan ($2.16 billion) for treasury and budget investments and 27 billion yuan ($3.94 billion) for special fiscal investments in 10 key energy conservation projects, as well as in urban sewage disposal facilities and supporting networks, industrial sewage disposal in key river valleys and the construction of energy conservation and environmental protection structures.

In the first half of this year, environmental protection authorities raised environmental evaluation standards for industries with high energy consumption levels and high emissions, such as power, iron and steel and petrochemical industries. It also ditched some construction projects that did not comply with industrial policies and violated laws and regulations on environment protection.

All these measures slowed the growth of the added value of industries with high energy consumption levels. According to NDRC statistics, the first half of 2008 saw year-on-year decline in the growth of coal, iron and steel, non-ferrous metals, cement and coking industries that feature high energy consumption levels. The data excluded the petrochemical industry whose growth rate increased 1.6 percentage points during the first six months of this year.

Meanwhile, growth in the output of major products with high energy consumption levels such as iron and steel dropped, as did energy consumption per unit of products. Of the 35 major products in key enterprises with energy consumption levels exceeding 10,000 tons of standard coal, 27 saw a decline in their energy consumption indices per unit of products.

Market-oriented practices

On August 5, the Beijing Environment Exchange (BEE) was established on Beijing's Financial Street, a 35-block area where the offices of many domestic and foreign financial institutions and Chinese regulatory agencies are located. On the same day, the Shanghai Environment and Energy Exchange (SEEE) was set up in Shanghai. The environment exchanges are new regulated marketplaces where companies can buy and sell emissions credits.

"This marks the important transformation of China's energy conservation, emissions reduction and environment protection efforts from a single administrative practice to a market-oriented practice," said Ai Baojun, Vice Mayor of Shanghai, at the opening ceremony of the SEEE.