Policy instruments for building energy efficiency in China

Abstract : More than one billion square meters of housing should be built in Chinese cities by 2020. At the same time, demand for energy services of Chinese households is very likely to increase as a result of continually improved living standards. Space heating already accounts for almost 40% of energy consumption in the residential sector in China. Thus the energy performance of buildings in Chinese cities represents a major challenge for ensuring energy supply security and combating climate change in the next decades. Several regulations relating to the requirement of the thermal performance of housing entered into force in China successively since the 1990s, the long term consequences of failure in enforcement and implementation have been examined from both energy security and climate protection perspectives. Nevertheless, few of studies in literature have addressed the issue from the perspective of economic investment decision. None of previous studies have studied the extent to which the current decision on more or less efficient standards in the large-scale urban infrastructure like buildings will have ultimately impact on the financing capacity in transforming the society toward low-carbon energy supply and consumption model, and the role the energy efficiency in buildings will play in enabling the public authority to harness the benefits resulting from reduced operation costs in early stage to facilitating the investment in new technology research and development and deployment in the future. The thesis seeks to answer two fundamental questions: 1. is there an optimal development pathway to buildings energy performance standards in the context of extremely rapid urbanisation in China? 2. If so, what are political and economic instruments to put in place to limit growth in energy demand and CO2 emissions in this sector by taking the economic and institutional characteristics into account? Based on a modelling approach, we compare a variety of strategies to manage energy demand in buildings and their economic costs in a Chinese city by 2030. Our quantitative analysis in the first part of thesis shows that the adoption of current Chinese BEE standards not only fails to achieve an optimal level from societal point of view, but would also be the most costly amongst the technical options available today even without taking into account any cost of environmental externalities. Inclusion of carbon price will certainly favour the high-efficiency construction technology. More importantly, the city-level long-term modelling results show that even partial non-compliance of building energy efficiency today will result in tremendous difficulty in transforming the whole infrastructure under climate and economic constraints. Financing the new generation of low-carbon supply technologies such as renewable heating and carbon capture and storage (CCS) require taking into account the buildings thermal quality without any delays, otherwise the whole urban infrastructure would be saddled with high operation costs dilemma for several decades because both retrofitting and alternative energy supply in this case would be extremely costly and difficult to undertake. Therefore we strongly recommend that serious attention must be attached to efficiency issue today, and the current thermal regulations should be strengthened significantly and quickly to avoid irreversible carbon lock-in deadlock in the next two decades. Indeed, financial shortage appears not to be the insurmountable barriers to upgrading the current efficiency standards based on our modelling results, instead the institutional aspect may be the main obstacle to the no-lose strategy that allows benefits creation and redistribution. Several economic and policy instruments are analysed in the second part to accompany the actions of buildings performance amelioration with removal of institutional barriers. We develop three main models to accompany the learning of high-efficiency construction technology and processing industry: 1). establishment of a carbon financing system via the integration of the Clean Development Mechanism of the Kyoto Protocol into the construction sector ; 2). flexibility of land use regulations on property developing and city zoning ; 3). creation of economic incentives to facilitate third-financing of energy efficiency in buildings, including the involvement of municipal heat companies. In this regard, district heating pricing reform must be carried out accordingly.
Document type :
Humanities and Social Sciences. École Nationale Supérieure des Mines de Paris, 2009. English. <NNT : 2009ENMP1621>

Contributor : Ecole Mines ParisTech <>
Submitted on : Thursday, July 30, 2009 - 8:00:00 AM
Last modification on : Tuesday, October 12, 2010 - 3:21:25 PM


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Jun Li. Policy instruments for building energy efficiency in China. Humanities and Social Sciences. École Nationale Supérieure des Mines de Paris, 2009. English. <NNT : 2009ENMP1621>. <pastel-00005310>




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