ON RENEWABLE ENERGY IN RURAL CHINA - Economics of Sustainable Energy in Agriculture - page 201

extremely high and it is likely that the assumed income elasticity of 6.3
cannot be maintained throughout the full period.
In Case 2, where for illustrative purposes the income elasticity is
assumed to drop to 3.2 by the year 1995 (equivalent to 50% of the original
level), total renewable energy consumption in rural China is expected to
reach 106 Mtce in 2020. The results are much lower than those of Li and
Zhang (1998). In Case 3 the income elasticity is assumed to gradually
decline by 80% from the original level of 6.3 in the period 1989-1995 to
1.3 in the period 2015-2020. Given this rather arbitrary chosen pattern,
total renewable energy in rural China is projected to reach 207 Mtce by the
year 2020, thus contributing to meeting the needs of the rapidly growing
rural economy, improvement of rural households living standard and
protection of the environment. These results are comparable to those of Li
and Zhang (1998), see Table 14.7. The three cases clearly demonstrate how
sensitive the results are for the assumptions on the development of the
income elasticity of renewable energy.
5. DISCUSSION AND CONCLUSION
To meet the rapidly growing demand for renewable energy in rural China
in the future, it is necessary to accelerate the supply of renewable energy in
rural China. Many problems need to be solved in order to enhance the
development of rural renewable energy. These problems include shortage
of capital, low levels of technology, lack of skilled labor, insufficient
commercial experience, lack of information, underdeveloped linkages with
the financial community and insufficient access to credit.
How to solve these problems? From a strategy point of view,
development should rely on support from both the government and the
private sector, including Chinese companies and financing institutions. At
the same time it is very important to enhance international cooperation for
the supply of renewable energy in rural China.
It is beneficial not only for China, but also for foreign companies
and institutions to develop international cooperation for renewable energy
in rural China. It will provide foreign companies and institutions with
business opportunities. The government of China constantly pays great
attention to the development of renewable energy.
There are many favorable ways of international cooperation for the
development of renewable energy in rural China. These ways include
introducing advanced technology, exchanging information, training labor,
and building demonstration projects for the development of renewable