China, Energy Efficiency, Solar

China: Conservation is in the Details

November 12, 2007 (Business Week) – Beijing has made big plans to save its rapidly deteriorating environment. The 11th Five-Year Plan, released in 2005, set ambitious, hard targets for the country in renewable energy use, energy efficiency, water conservation and other areas. But whether these grand strategies ultimately pay off may come down to details such as whether workmen can be trained to install better quality windows in buildings.

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At least this is the view of Rob Watson, the man who came up with Leadership in Energy and Environmental Design (LEED), the ratings system that certifies a building as “green.”

“A good energy efficient window is 10 times more expensive than a standard window in China,” he said. “But putting in these good windows can reduce your air conditioning costs by half.”

Watson has advised the Chinese government on developing new building codes. He says that although the best Chinese buildings are just as energy efficient as their global counterparts, the average building is much more wasteful. This is compounded by developers putting speed of construction before basic efficiency technologies like insulation.

Now, those problems are catching up with China. It is now the world’s second-largest energy consumer after the US, but its energy efficiency is just one-fifth that of America’s. Watson notes that buildings use up 43% of China’s energy supply.

Beijing’s first step to solve the problem was to set energy savings targets for buildings. New buildings in urban areas have to be twice as energy efficient by 2010, and old buildings in major cities must be retrofitted to achieve energy savings of up to 65%. By 2020, all buildings in Chinese cities are to be energy-saving.

TARGETING EFFICIENCY
The buildings savings targets, announced last year, are part of an overall goal to reduce energy intensity – the ratio of energy consumption to economic output – by 4% annually from 2006 to 2010. This equates to a 20% cut in three years.

Improving energy efficiency in Chinese buildings is easy – in theory. Many buildings are at such low efficiency standards that even small improvements will save large amounts of energy.

“Buildings construction is the low-hanging fruit,” said C.S. Kiang, dean of Peking University’s environmental science college. He believes getting developers to use better building materials, install basic insulation and implement more temperature controls could deliver 15% of the 20% in energy savings targeted.

In order to implement these policies, however, the government must beef up its enforcement regime. Watson estimates that, in Beijing alone, at least 100 more inspectors will be required if the targets are to be reached. These inspectors must also have more bite.

“Somebody has to draw a line in the sand,” he said. “Until [the government] prevents a building from being occupied because it hasn’t hit the targets, nobody will take them seriously.”

UNDERSTAFFED AGENCIES
Wang Yong, director of environmental consultancy ERM in China, adds that there is a lack of resources and manpower in enforcement agencies across the country, not just on construction sites. Even the national level State Environmental Protection Administration (SEPA) only has a skeleton staff of about 300.

“Do you know how many people are in the [US] Environmental Protection Agency?” Wang said. “Ten thousand! And China needs even more than that.”

Another problem is the way enforcers are selected. Acccording to Wang, local governments are in charge of staffing their own environmental protection bureaus. But there is often little incentive to enforce environmental guidelines because they are still hungry for investment, even if it means accepting polluting factories.

These problems caused Beijing to miss its energy target last year. Instead of cutting energy intensity by 4%, China only managed a 1.33% reduction – which makes an overall decrease of 20% by 2010 an even more difficult result to achieve.

The central government doesn’t have a strong track record on its environmental commitments. According to a study by the Asian Development Bank, almost half the environmental protection targets set out under the 10th Five-Year Plan, which ended in 2005, were not met.

Still, there is a sense that things are different this time around. California’s record of reducing energy consumption by 4% annually for years and Denmark’s success with wind energy are both held up as examples of conservation models that do work. But perhaps the most important factor is that China’s environment is coming up against its own hard limits.

“The environmental issues have become more and more acute,” Kiang said. “There is no time to wait. In China, [the environmental problems] are more urgent than anywhere else in the world – it’s a matter of survival here.”

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