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Calculating the economic cost of environmental degradation is proving a tough challenge for two government bodies.

But the head of the National Bureau of Statistics (NBS), Xie Fuzhan, yesterday said his organization will continue to attempt to do so, despite some experts describing it as a "mission impossible".

"We are still doing research on how to calculate our green GDP (gross domestic product)," Xie told reporters at a press conference organized by the State Council Information Office.

He said no country in the world used the green GDP accounting system, which deducts the cost of environmental damage and resource depletion caused by economic development from the standard GDP figure.

An insider named Zhang, who asked to be referred to by only his surname, said Xie's organization had considered giving up on the complicated task, but Xie ruled that out.

"Despite the difficulties, we will carry on with our research and try all means to find the solution," Xie said.

In contrast, the State Environmental Protection Administration (SEPA), the bureau's partner on the accounting project, has already shifted its research focus to the use of market tools to tackle environmental woes, Zhang, who works for a US-based NGO, said.

Zhang, who is close to both governmental agencies, said the SEPA had mobilized a large taskforce to work on environmental taxation, ecological compensation, the green capital market and emissions trade research.

"As far as I know, they have shown an intent to quit the green GDP plan," he said.

The organization for which Zhang works sponsored the SEPA and the NBS in 2004, when they first embarked on the project.

But Zhang said it now seems "meaningless", even if they did find a workable system to calculate the green GDP.

"It would still be difficult to persuade other economies in the world to use the system," he said.

Since 2004, the SEPA and the NBS have been running pilot projects in 10 provinces and municipalities, including Beijing and Tianjin.

But not all regions have been enthusiastic, Zhang said.

In Sichuan, for example, only the provincial environmental protection department took part in the project, while in Hebei, the provincial statistics bureau said it was not interested in the accounting system, he said.

There is no evidence to suggest China will find a reliable and accurate solution, at least in the near future, because the environmental monitoring system in the country is far from complete, Zhang said.

"Even if we have the monitoring system, the difficulty results from the fact that GDP is a sum that can be measured in money terms, while it is very difficult to put a price on environmental losses and resource depletion," Zhang said.

"For instance, how do you put a price on the impact on residents of a polluted river?"

Zhang said no country had found a solution to the challenge, even though the concept had been widely discussed around the world for more than 30 years.

Power consumption

China's electricity consumption rose by 14.2 percent and its power consumption per unit of GDP by 2.75 percent last year, the NBS said yesterday.

The proportion of electricity in the total figure rose from 38.1 percent in 2005 to 39.5 percent last year, Xie said.

"It was the largest increase in the past three years," he said.

It shows the proportion of coal being used has decreased, he said.

Xie attributed the increase to the non-productive consumption of power.

"As people's living standards have improved, so they have used their heaters more in winter and air conditioners more in summer, which has meant more power being consumed," he said.

Xie said another factor was the rapid growth of industries that consume large amounts of electricity.

Beijing registered the best energy use efficiency of Chinese provinces last year, with its power consumption per unit of GDP falling by 5.01 percent.

North China's Inner Mongolia Autonomous Region saw its electricity consumption per unit of GDP increase by 11.61 percent last year, the highest nationwide.

(China Daily 07/13/2007 page4)