China's central government plans to increase spending on energy efficiency and greenhouse gas emission reduction schemes by 78 percent this year as part of a larger effort to meet its 2010 environmental targets, the Ministry of Finance said on Monday.

Total expenditure would rise to 41.8 billion yuan (US$5.89 billion) from 23.5 billion yuan last year, the ministry said in a statement on its website.

Though not obligated by the Kyoto Protocol, China has set a target of reducing energy consumption for every 10,000 yuan of GDP by 20 percent from 2006 to 2010, with discharges of key pollutants set to drop 10 percent.

The ministry would earmark 27 billion yuan of special funds and the remaining 14.8 billion yuan would come from the National Development and Reform Commission (NDRC), the country's top economic planner, it said.

Out of the 27 billion yuan, 7.5 billion would be invested in ten energy-saving programs, including technological transformation in factories, substitutes for oil and the introduction of energy-efficient light bulbs.

The ministry would spend 4 billion yuan in closing inefficient coal-fired power units and outmoded steel plants, while 5 billion yuan would be used to tackle environmental issues in major rivers and lakes.

China's energy consumption per unit GDP fell 1.33 percent in 2006, only a third of the annual goal of 4 percent. Both emissions of sulphur dioxide, a cause of acid rain, and chemical oxygen demand (COD), a measure of water pollution, were increasing.

The failure prompted the central government step up efforts last year, ordering that progress in environmental protection be a key standard by which officials and company heads are judged.

China also scrapped export tax rebates on hundreds of products to curb energy-consuming and pollutant-discharging industries and exports of key natural resources. Banks are warned against lending to non-environmentally friendly projects.

Such efforts had begun to show results, NDRC deputy chief Xie Zhenhua said in December when he announced that China's energy consumption fell 3 percent in the first nine months of last year, with sulphur dioxide emissions and chemical oxygen demand both dropping.

(Xinhua News Agency March 25, 2008)