In May 2007, the State Council issued the Comprehensive Work Plan for Energy Conservation and Reduction of Pollutant Emission to stress the importance of the work and focus on relevant policy implementation. In June, the State Council established a leadership group on energy conservation and reduction of pollutant emission, headed by Premier Wen Jiabao.
The answer to this second technical question is typically model-dependent. However, I suggest that a long-favored prescription of public finance economists – to lower the tax rate on physical investment – would give rise to higher output, consumption, capital, and employment in a wide range of models.