The Effectiveness of China's Energy Conservation Policy

Abstract

This paper aims to answer the following question: Did China's energy conservation policy work on industry? This study reviewed the development of China's energy conservation policies and then calculated China's industrial energy conservation rate and the amount of energy conservation between 1996 and 2014 with the Revised Divisia Index Method in order to assess the effectiveness of China's energy conservation policy. The results of this research show that: First, industrial structure adjustment, energy structure optimization, and energy pricing system reform were the major energy policy targets of both the Ninth Five-Year Plan and the Tenth Five-Year Plan periods to achieve the energy conservation rate of respective plans. Second, in addition to continuing all the above energy conservation policies, although China began to limit high energy-consuming industries through the compulsory Action for Energy Conservation of 1,000 Enterprises during the Eleventh Five-Year Plan period and the Action for Energy Conservation and Emissions Reduction of 10,000 Enterprises during the Twelfth Five-Year Plan period, none of them could slow the energy consumption caused by rapid industrial growth, making the industrial energy conservation target of the Twelfth Five-Year Plan difficult to achieve.