(China Daily)
Updated: 2008-04-24 07:18

The Chinese government's financial support for widespread use of energy-saving bulbs is a much-needed step to boost the country's overall energy efficiency.

Yet, to shift the focus of national economy to a cleaner and sustainable model of development, policymakers also need to introduce a market-oriented pricing mechanism.

As the world's biggest light-bulb maker, China unveiled on Tuesday a massive subsidy program to promote the use of energy-efficient bulbs. In the first stage of the plan, 50 million energy-saving bulbs will be sold at a hefty discount to consumers and producers who would be reimbursed by the government for the shortfall.

The benefits of such green subsidies are obvious.

By significantly lowering the high, up-front costs of energy-efficient products, these financial subsidies will persuade a huge number of consumers to embrace such green products. Generally, an efficient light bulb costs four to six times more than an ordinary incandescent bulb. But the former can last 10 times longer and use between a quarter and a fifth of the energy of the latter, while producing the same light.

It is estimated that if everyone in China made the switch to green lighting, the country would save more than 60 billion kwh of electricity, thereby reducing carbon dioxide emission by 60 million tons every year.

For a country that is committed to cutting its overall energy intensity by 20 percent and pollutant emission by 10 percent between 2005 and 2010, such a subsidized program to promote the use of low-energy light bulbs is badly needed and should be expanded rapidly.

However, if the program is to work wonders, policymakers must quickly fix the current pricing mechanism to allow energy and utility prices to better reflect not only market supply and demand but also their environmental cost.

Though green subsidies can attract more consumers to energy-efficient light bulbs in the shops, they do not guarantee that users will use them in an energy-saving way.

As long as the electricity price is kept at a level too low to cover its environmental externalities, few users will take the trouble to turn off these light bulbs whenever conditions permit.

In the national drive for energy conservation, changing lifestyles of consumers is as important as introducing cleaner production methods in all factories.

The introduction of a pricing mechanism that goes with the grain of the market system will make financial subsidies for the purchase of energy-efficient products a more effective tool to facilitate energy conservation.

(China Daily 04/24/2008 page8)