The launch of Agenda 21, China’s first LEED-certified "green" building, in Beijing in 2004 fueled talk about energy efficiency in real estate. But progress has been slow and, despite growing environmental concerns, it’s unlikely to speed up soon.
In a recent paper, the Boston Consulting Group and the US-based Natural Resources Defense Council estimated operational use of China’s buildings accounted for upward of 25% of the country’s total energy consumption, more than the cement, iron and steel sectors combined.
"If you include energy used for manufacturing and transporting building materials and products, China’s buildings consume 30-40% of the country’s total energy," BCG’s Justin Fung said.
According to the China Greentech Report 2009, issued by a group of firms with an interest in the environmental sector, certified "green" floor space accounts for less than 1% of newly built projects. Although China’s buildings use nearly four times less energy per square meter than those in developed countries, they are responsible for nearly 17% of the country’s annual greenhouse gas emissions.
Beijing has set targets for buildings to comply with energy efficiency standards. Under the 11th Five-Year Plan, which covers the 2006-2010 period, buildings are expected to contribute 40% of total energy efficiency improvements. However, implementation of any standard beyond first-tier cities is a far-off prospect.
The Ministry of Construction does have a 3-star certification system – known as Evaluation Standard for Green Building – for grading energy efficient developments, similar to the US Green Business Council’s internationally recognized Leadership in Energy and Environmental Design (LEED) certification. But so far, only about 10 projects in the entire country have received such a star, compared with LEED’s 38.
Cost is always a sticking point thanks to the common assumption that going green means more expense. Yet according to BCG, certified green buildings cost just 4-5% more than their polluting peers and returns on investment are speedy.
Few developers are listening. Kevin Mo of the Natural Resources Defense Council explained that because higher initial costs for efficient technologies are borne by the developer, there is little incentive to build a project in line with higher energy efficient standards.
"For those buildings, particularly commercial spaces, which do have certification, a lot of their tenants are international and have to comply with certain voluntary standards for their corporate image," Mo said.
More tenants asking for efficient buildings may be a long-term solution. For now, though, the prospects for green buildings in China look rather gray.
