A new method of calculating energy use could change the way people think about energy efficiency in industry and help businesses and governments better target conservation measures and cut emissions, a China-born economist in New Zealand said on Wednesday.

Dr Baiding Hu, a senior lecturer at Lincoln University, identified a flaw in the traditional and globally accepted calculation of energy efficiency as a ratio of industrial production, or output, to energy use, or input.

Using data from power plants, oil refineries and coal mines in China, Hu found that output could increase significantly with improvements in machinery or increases in labor or even capital, while energy use remained unchanged.

The resulting lowering of the output-input ratio would give the appearance of greater efficiency even if that was not the case, Hu told Xinhua in a phone interview.

"Something like better machinery could improve the ratio

that could happen even when the energy use is wasteful," said Hu.

"What I'm saying basically is that we need to find the technical efficiency of a plant in order to calculate the energy efficiency."

Hu said the study was compiled using data sets from China because Chinese firms had the detailed data for individual plants.

"It's not just about machinery it involves the efficiency of the use of all the factors at a micro-level," said Hu, who originally came from Hunan Province and has been in New Zealand since 2006.

"This is a methodology problem, but it applies to any research that calculates energy efficiency," he said.

"The method I'm proposing works better for micro-level data

at plant level or even farm level than for macro-level data. The more detailed the production input, the better."

With China aiming to cut energy use per unit of GDP by 15 percent by 2015, the new method of energy efficiency calculation could help target measures to cut energy use and emissions and better allocate investment in renewable power generation.

But it would be equally applicable to businesses and governments around the world, he said.

"They should be able to tell which production factor has the largest inefficiency and has the largest impact on the energy efficiency," said Hu.