Energy efficiency in buildings: a contribution of China to mitigate climate change

Research Question:
Energy has become a crucial topic because the world’s development system is based on the use of energy but it has become clear that the use of energy has serious impacts on the environment. On the one hand, energy is essential for social and economic development and the ability to reach the MDGs. On the other hand, current energy production and use patterns have serious impacts on the on the global climate and the local air pollution. Levels of emissions are highly correlated with levels of energy use. More than 60 percent of the world’s greenhouse gas (GHG) emissions and more than 70 percent of all CO2 emissions stem from energy-related activities. Besides the energy generation sector (supply side), the building and household level (demand side) plays a key role. Buildings are responsible for at least 40 percent of energy use in most countries.
In order to avoid dangerous climate change and stabilize the climate, the energy sector, including the building sector, plays a key role. Only by steering the world’s energy system onto a more sustainable path, these aims can be reached. The demand side of energy (especially buildings and households) plays a key role here. The increase of energy efficiency and the conservation of energy benefit the climate by reducing GHG emissions. Besides, measures in this sector promise economic success. The Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report estimates that by 2020 CO2 emissions from building energy use can be reduced by 29% at no net cost.

The case of China:
China’s economy grows at an enormous pace. The average annual growth rate amounts to about nine percent in the last two decades and this trend is expected to continue. In order to sustain this rapid growth a steadily growing supply of energy is indispensable. China is the second largest energy consumer in the world and energy is mostly provided by coal. Estimations indicate that China’s total primary energy consumption will more than double between 2000 and 2020, with heavy reliance on coal. However, compared to international standards the per capita energy use in China is low. The use of energy is quite inefficient. China’s energy intensity, the ratio of energy use to GDP, is still quite high. It declined significantly in the late 1990s but since 2002, China again uses more than one unit of energy to produce one unit of GDP.
China’s energy use has enormous impact on local air pollution and the global climate. Today, China’s share of global CO2 emissions is about 18 percent. It is expected that China will be the world’s largest emitter by the end of 2009 at the latest. Global warming and climate change are directly linked to the increase of GHG concentrations in the atmosphere and thus to GHG emissions.
As many countries, China is highly vulnerable to climate change. China’s first National Assessment of Global Climate Change, released recently by the Ministry of Science and Technology (MOST), states that China already suffers from the environmental impacts of climate change: increase of surface and ocean temperature, rise of sea level, and decrease of snow and ice cover lead to higher vulnerability towards climate change and increased occurrence of e.g., cyclones, droughts, and floods. Beyond that, China suffers from environmental problems caused by other effects of fuel combustion as for example air pollution (with a strong negative impact on health) and acid rain. Seven of the world's ten most polluted cities are in China. Therefore, China has a strong self-interest in avoiding GHG emissions.
China has formulated energy policy targets and initiated several measures to address these problems. According to the 11th Five-Year (2006-2010) Plan for National Economic and Social Development, China has determined to reduce energy intensity by 20 percent and the total volume of major pollutant discharges by 10 percent between 2006 and 2010. The implementation of the goals is aimed to be accomplished by national and international approaches (e.g., CDM) that are implemented on the local level.

Objective of the Country Working Group and Approach:
The main goal of the proposed study is to analyse whether policies and measures applied in China’s building and household sector are sufficient and effective to steer the energy system on a more sustainable path and reconcile the development and environment goals. China’s economic and social development but also its environmental performance depend on which path is chosen.
The research is twofold. Firstly, the research project maps the relevant policy measures and their instruments that aim at increasing energy efficiency in the building sector and on the household level. Mapping will record policy aims, focus, scope, and experiences. It further assesses the relevant framework conditions by evaluating the environment in which the buildings-related instruments and their technologies are implemented as well as the relevant actors (e.g., industry and other private actors, state actors, NDRC, SEPA, local governments). The framework conditions comprise the economic, political, regulative and institutional settings of the Chinese building sector.
Secondly, the study evaluates the policies and their implementing instruments following the OECD (1997) approach to evaluate environmental policy instruments. The relevant criteria are environmental effectiveness, economic efficiency, administration and compliance costs, revenues, wider economic effects, soft effects (awareness, attitudes), and dynamic effects (innovations). Besides these factors, the framework conditions and especially the institutional context of the measures and instruments and its influence on policy-making and implementation are investigated.
The study should come up with recommendations for Chinese and international policy makers on the relevant steps that can be taken to improve the energy system applied to the building sector and the household level. The recommendations are formulated with a view to the international climate negotiations but also the national debates on sustainable development. It can give guidance to development cooperation but also to other countries (not limited to developing countries) that face the challenge of changing the current non-sustainable development path.

Miscellaneous:
The present project was carried out by a research team of the German Development Institute (DIE) within the framework of the DIE’s 2007/2008 postgraduate training course

Relevant publications:
Richerzhagen, Carmen / Imme Scholz (2007): China's capacities for mitigating climate change, Discussion Paper 22/2007