Lin Boqiang: Energy conservation and emission reduction should be mainly based on market means

Unless accompanied by energy price reform, improving energy efficiency may not necessarily reduce total energy consumption or emissions.

The outline of China's 11th Five Year Plan proposes to reduce energy consumption per unit of GDP by about 20% and the total emissions of major pollutants by 10% during the 11th Five Year Plan period. Realizing the energy-saving and emission reduction targets of the 11th Five Year Plan is a mandatory task proposed by the government, with strong administrative constraints.

At present, the achievement of emission reduction targets is relatively smooth, while the achievement of energy-saving targets is relatively difficult. Therefore, the recently released "Notice of the State Council on Further Increasing Work Efforts to Ensure the Achievement of Energy Conservation and Emission Reduction Targets during the Eleventh Five Year Plan" requires full support for energy conservation and emission reduction work to ensure the achievement of the targets.

The difficulty of energy conservation in China at the current stage cannot be underestimated. The first issue that needs to be addressed is the rigidity of current energy demand. In 2007, China's GDP accounted for about 6% of the world's total, while steel consumption accounted for over 30% of the world's steel consumption, and cement consumption accounted for approximately 55% of the world's cement consumption. The above facts indicate that China is currently in the process of urbanization.
The recent energy development trends in China also indicate that energy consumption is growing rapidly. From 2003 to 2008, the total energy consumption in each year increased at a rate close to double digits, due to the rapid growth of high-energy consuming industries and the acceleration of urbanization.

Due to different social conditions in various countries, the process of urbanization experienced may also vary, but this process has been experienced by every developed and middle-income country. A study by the China Energy Economics Research Center at Xiamen University shows that without major catastrophic problems, it will take about 12 years for China to enter the process of urbanization as a middle-income country.