From Gray to Green: GHG Emissions Reduction Potential in China’s Building Sector
After more than 16-hours of air travel I finally landed at midnight in Hopenhagen, the new eponym given to Copenhagen, where UN Climate Change Conference/COP 15 is now underway; some two hundred national leaders have gathered in the hope of reaching an agreement on climate change. Unfortunately my suitcase didn’t arrive with me and I was concerned about showing up to NRDC’s side event in my red sweater. Luckily, the airline delivered my suitcase to the hotel three hours before our side event. I showed up ready to speak to a large and rapt audience crammed tightly into a room at the Bella Center, where the COP 15 Climate Conference has been taking place since yesterday to the end of next week.
NRDC’s side event took place on the second day of the climate conference Jake Schmidt served as the moderator; Barbara Finamore delivered an opening speech, followed by Mark Levine from LBNL, Lv Xuedu from China Meteorological Administration, and Robert Earley from iCET. I then made a presentation followed by my colleagues Jingjing Qian and Alex Wang.
The topic I discussed was: “From Gray to Green, Make China’s Rapid Urbanization Sustainable” (here is my presentation), to emphasize the importance of the building sector in China’s effort in cutting GHG emissions while maintaining its economic growth. According to a UNEP SBCI report (I serve as a think tank member in SBCI), the building sector has the greatest potential of any sector for reducing GHG emissions, and it is impossible to meet the climate change commitment without addressing building energy performance.
Though there is no official number on building sector’s energy consumption in China, it is generally agreed that the building sector accounts for about 25 percent of China’s total energy use, not including the energy embodied in the building materials. The three industrial-subsectors that are involved with building production - steel, iron and cement - are extremely energy-intensive, consuming roughly additional 25 percent of China’s total energy use. If you examine the building sector in China from a life-cycle perspective, it easily accounts for 40 to 45 percent of total energy use, if not more. To compound the scenario, China’s rapid urbanization is increasing the share of energy use by the building sector every day.
China’s current urbanization ratio is around 45 percent. It only took 20 years for China to reach an urbanization ratio of 40 percent from 20 percent. To put this rate in perspective, it took 120 years for the United Kingdom, 100 years for France, 80 years for Germany and 60 years for the United States to cover the same span. Furthermore, it was estimated that, by 2020, there will be another 300 million people migrating from rural to urban centers; this is a population size equal to that of the entire U.S. If you multiply the size of the migrating population by three (which is the ratio of electricity consumption by a city resident compared with that of a rural one), the increasing electricity consumption for the building sector is astronomical.
In September, in collaboration with the Boston Consulting Group, NRDC released a joint research paper on GHG emissions reduction potential in China’s building sector. If all of China’s commercial and residential buildings, new and existing, could cut energy use by 70 percent and 55 percent, respectively by 2015 (the end year of China’s 12th five year plan), the avoided CO2 emissions would amount to 2 billion metric tons of carbon. This is a very optimistic estimate, but also very encouraging. China’s first green building, the Agenda 21 building owned by China’s Ministry of Science & Technology, proved that it is economically feasible to cut energy use by 72 percent with existing building technologies. The increased initial investment was only 8 percent higher than regular office buildings, and that was when a lot of currently established regular high-performance building products such as low-e windows, were not yet available in China, thereby raising the price tag of the construction cost (in 2004).
The potential for GHG reductions in the building sector is huge, and the challenge is equally daunting. Retrofitting existing buildings invites a series of questions on existing policies, incentives, and financing structures. It is estimated that most of China’s existing buildings are inefficient and will remain so for the next 30 or even 50 years, if no retrofit is conducted.
A fully functional building rating and labeling system is also missing. Though China released a national building labeling draft standard, it still needs a lot of improvement. An integrated and comprehensive incentive system is also necessary to incentivize the private sector to implement energy efficiency measures beyond the minimum requirements set by codes. Initiating one voluntary program on building efficiency after another without appropriate and systematic incentives will not serve the purpose. Again, as I always mention, carrot and club should come together. Enforcement should be strengthened, which means those who violate the building energy codes should be penalized.
We need to be realistic about the challenges ahead and pragmatic in our approach. There is no question that buildings are a critical component in reducing China’s GHG emissions. Fortunately the steps necessary to reducing buildings emissions are not opaque; the strategies are clear, feasible, cost-effective and shovel-ready. What is left is a framework of policies and programs that removes barriers and generates demand.
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