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China To Provide $2.2 Billion In Subsidies For Green Consumer Tech

In 2011, Chinese energy consumption "rose at the fastest pace in four years":http://www.bloomberg.com/news/2012-02-22/china-energy-consumption-rises-at-fastest-pace-in-four-years.html, continuing "a decade":http://www.google.com/publicdata/explore?ds=d...

In 2011, Chinese energy consumption rose at the fastest pace in four years, continuing a decade of massive growth. In a bid to curb that demand through efficiency — and perhaps snag some headlines about going green to balance out those involving “Greyjing” — China’s Ministry of Finance has announced a 14 billion yuan ($2.2 billion) initiative to subsidize energy-saving air conditioners and computers.

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According to Xinhua, China’s official news agency, the ministry said that the program will last one year, although it didn’t say when it would start, and is “expected to raise the market share of the energy-saving products to more than 40 percent.” The program is a direct reaction to China’s booming purchasing power, which has allowed millions to own technology once considered luxuries, but which has not necessarily ensured that those products are efficient. From Xinhua:

The country has currently 130 million desktop computers, which consume 31.2 billion kilowatt-hours of electricity every year. The annual power consumption of air-conditioners reach 350 billion kwh, data showed. In 2011, the power consumption of fans, pumps, compressors and transformers accounted for 40 percent of the country’s total, but they were only 80 percent as efficient as those in developed countries. “The subsidy program will help save 31.3 billion kwh of electricity every year and drive sales of the energy-saving products by 155.6 billion yuan,” the official said.

While the Chinese government hasn’t released specifics for the plan, it sounds like it could be similar to the old Cash for Clunkers program, and as that failure showed, trading in and destroying a working computer for to manufacture a brand new, more efficient one doesn’t necessarily save energy and may not do much to create sustainable demand. On the other hand, if the subsidies help people who previously didn’t own computers or air conditioners buy one or both, that would only increase energy consumption.

But the program is also a direct injection of cash into Chinese manufacturers, which makes it look like it’s designed to help spur demand (and thus production feasibility) for green tech. As we saw in the alleged price manipulation fiasco with Chinese solar panels, China is pushing hard to be a leader in green tech, and now it looks like that will increasingly include consumer technology. And, with the ministry claiming that a similar program saved 28 billion kwh per year since 2009, the program just might help curb China’s exploding appetite for coal power.

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Follow Derek Mead on Twitter: @derektmead.