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Globe stimulus needed

(China Daily)
Updated: 2009-02-26 07:45

The Chinese government's decision to double fiscal subsidies for energy-efficient light bulbs this year is good news for both producers and consumers. But such a green stimulus should not be made only an expedient to address the current economic difficulties.

To make the pursuit of energy-saving, environmentally friendly and sustainable development into a key driving force behind ongoing changes to its growth model, policymakers should make an explicit long-term commitment to continuously increase government expenditure for all such green efforts.

The Ministry of Finance announced on Tuesday that the government will subsidize 100 million energy-efficient light bulbs this year, compared to 50 million last year.

Given the huge and immediate success of this program last year, it is fully reasonable for the government to expand the green stimulus as fast as possible this year.

China launched a nationwide campaign to subsidize and promote the use of 150 million energy-efficient lamps, a target set for the 11th Five-Year Plan period (2006-2010). With the central government offering a 30-percent subsidy on wholesale purchases and a 50-percent subsidy on retail sales and some local governments offering additional subsidies up to 40 percent, 62 million energy-saving light bulbs had been sold by the end of January.

The benefits of this subsidy program are more than obvious.

Producers have found a vast and growing domestic market for energy-efficient lamps. Consumers could save as much as 1.6 billion yuan (US$234 million) in electricity a year. With a fiscal input of 280 million yuan by the central government, the country saw an increase in domestic consumption by 650 million yuan. More importantly, those 62 million green bulbs can help save 3.2 billion kwh of electricity annually and cut discharges of carbon dioxide by 3.2 million tons and sulfur dioxide by 32,000 tons.

By doubling the quota for subsidized green lamps this year, the government can surely cushion the impact of the global financial crisis on light bulb producers.

However, besides the immediate stimulus effect for producers, policymakers should also focus on long-term implementation of this green subsidy program.

Lighting now accounts for about 12 percent of China's total electricity consumption, and using energy-saving bulbs could cut such power consumption by 60 to 80 percent. Promotion of the 150 million subsidized energy-efficient light bulbs should mark only the beginning of phasing out the more than 1 billion ordinary bulbs that the country consumes every year.

Since the government is now set to be ahead of its five-year schedule to promote green lighting, policymakers should seize the momentum to announce a more ambitious follow-up subsidy program. It is believed that this popular move will not only raise public awareness of energy conservation but also set a good example for the efficient use of fiscal funds.

(China Daily 02/26/2009 page8)