Voluntary agreements for increasing energy-efficiency in industry: Case study of a pilot project with the steel industry in Shandong Province, China Page: 2 of 10
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Fostering innovative approaches to reduce the use of polluting energy resources and to
diminish pollution from industrial production that are tailored to China's emerging
market-based economy is one of the most important challenges facing the nation today.
China has a history of taking effective actions to limit industrial energy consumption. In
1980, China introduced the energy strategy of "insisting on both resource development
and resource conservation with the conservation as the first priority". Numerous energy-
efficiency polices were adopted that successfully reduced energy use while the economy
grew at a rapid pace. Through these programs China was able to decouple energy use
from economic growth, allowing the nation to industrialize without draining the national
budget to pay exorbitant energy costs that would have occurred without such a concerted
effort (Sinton, et al., 1998). During the past 20 years, China experienced an average
annual increase of 4-5% in energy consumption while maintaining average annual
economic growth of 8-9%, realizing the macro-goal of meeting increased energy demand
half through energy development and half through energy saving (Xie, 2002). These
successful programs and policies, however, were implemented during a different era in
China - a time when there was nearly complete government control over the nation's
major industrial producers.
Today China faces a new situation: as it moves toward a market-based socialist economy,
government control is weakening and enterprises are privatizing or becoming much more
heavily influenced by market pressures. Issues related domestic and international
competitiveness are growing in importance. Entry into the World Trade Organization
(WTO) introduces new rules and new challenges for China's industries. At the same
time, production of industrial materials is growing faster than ever experienced before.
While tremendous energy conservation and environmental protection achievements were
realized in the past, there remains a great gulf between the China's level of energy
efficiency and that of the advanced countries of the world. Sustainable development of
China will be confronted with many obstacles. On the one hand, due to the large
population, China possesses a relative lack of resources, especially oil resources, and the
tension between oil supply and oil demand is becoming increasingly obvious. On the
other hand, there is a great deal of wasted energy and many examples of low energy
efficiency. At present, China's energy consumption per unit of GDP is more than two
times higher than world average and energy consumption for production of the main
energy-intensive products in China is 40% higher than international consumption. Thus,
sustainable utilization of natural resources has become a strategy for safeguarding the
nation's long-term economic development.
The pressures of rapid industrial production growth, continued environmental
degradation, and increased competition create a situation that calls for a strategically-
planned evolution of China's industries into world-class production facilities that are
competitive, energy-efficient and less polluting. Such a transition requires the complete
commitment of industrial enterprises and the government to work together to transform
the industrial facilities of China.2
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Price, Lynn; Worrell, Ernst; Sinton, Jonathan & Yun, Jiang. Voluntary agreements for increasing energy-efficiency in industry: Case study of a pilot project with the steel industry in Shandong Province, China, article, March 1, 2003; Berkeley, California. (https://digital.library.unt.edu/ark:/67531/metadc781503/m1/2/: accessed April 17, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.