China will exhaust all effective means possible to meet the target of improving energy efficiency by 20 percent from 2005 to 2010, a senior economic planner said Tuesday.

Zhang Xiaoqiang, deputy director of the National Development and Reform Commission, made the remarks at the World Economic Forum (WEF) Annual Meeting of the New Champions 2010, also known as the Summer Davos, in north China' s port city of Tianjin.

China will roll out better-targeted measures over the rest of the year, including further eliminating outdated capacity, Zhang said.

His remarks came after Chinese Premier Wen Jiabao admitted at the forum Monday that it was no easy task for China to reach the 20 percent efficiency target as the country's consumption of energy relative to economic output rose slightly from a year earlier in the first quarter.

China's energy use per unit of GDP rose by 0.09 percent from a year earlier in the first half, according to data from the National Bureau of Statistics.

Although the growth pace was much slower than the 3.2-percent increase China reported for the first quarter, it was still no good news to the government as previously the country had achieved a 15.6 percent decline in energy consumption per unit of GDP in the first four years of the 11th five-year plan (2005-2010).

"I believe the energy efficiency target set for the 11th five-year plan period (2006-2010) will be met with efforts from all sides," said Wang Junfeng, associate professor of the Research Center of Circular Economy of Tianjin-based Nankai University.

The nation has taken many steps to reduce carbon emissions, including scrapping preferential electricity rates for some high energy-consuming businesses, discourage exports of energy-intensive products by removing export tax rebates on 406 products and shutting down of energy-intensive enterprises.

"Some of the measures were introduced in the second half and some measures taken in the first half may show greater effects over the rest of the year," Wang said, implying China's second-half energy consumption relative to economic output will drop compared with the first half.

Cheng Siwei, a renowned Chinese economist and former senior legislator, said at the forum "there maybe some resistance for companies to cut emissions. But if they fail to meet the target, they will be shut down and the CEOs will face punishment," indicating the government's strong push to improve energy efficiency.

Chinese Premier Wen Jiabao on Monday also affirmed the country's achievement in energy conservation, emissions reduction and environmental protection.

Last year, the nation shut down small thermal power plants with a total capacity of 26.17 billion kilowatts and phased out inefficient production capacity of 16.91 million tonnes of steel, 21.13 million tonnes of iron and 74.16 million tonnes of cement, Wen said in his opening speech at the forum.

He also vowed to eliminate more energy-consuming companies over the rest of the year.

By the end of this month, the nation will have eliminated an additional amount of inefficient production capacity, including 8.25 million tonnes of steel, 30 million tonnes of iron and 91.55 million tonnes of cement, he said.

The country's energy efficiency and carbon emissions are closely linked because coal, which releases carbon into the atmosphere when burned, accounted for 68.7 percent of the country's overall energy mix last year.

China last year pledged to cut the amount of carbon emissions per dollar of economic output by 40 percent to 45 percent by 2020 from the 2005 levels.

In the long-run, China should rely on the transformation of the nation's economic growth and market instruments to improve energy efficiency, Zhang Xiaoqiang said.

Cheng Siwei the economist also suggested the country promote the development of renewable energy and carbon market to help reduce greenhouse-gas emissions.

He said China is estimated to reduce the proportion of fossil fuel in total energy mix from the current 91 percent to 85 percent in 2020. He also proposed carbon tax to promote sustainable growth.

"We are suggesting imposing carbon tax on thermal power plants and using the revenue to subsidize solar and wind energy development," Cheng said.

(Xinhua News Agency September 15, 2010)