Public policy instruments for energy management in emerging countries: the case of housing in China.

Authors Publication date
2009
Publication type
Thesis
Summary More than one billion square meters of housing are expected to be built in Chinese cities by 2020. At the same time, the demand for energy services by Chinese households is likely to increase as living standards continue to rise. Heating already accounts for nearly 40% of residential energy consumption in China. The energy performance of buildings therefore represents a major challenge for Chinese cities in terms of energy security and the fight against climate change in the decades to come. Several regulations on the thermal performance of housing have been successively implemented in China since the 1990s. Yet, the economic and environmental consequences of their implementation have not been systematically examined from a long-term perspective. This thesis seeks to answer two fundamental questions: 1. is there an optimal trajectory for the evolution of building energy performance standards in the context of China's extremely rapid urbanization? 2. if so, what are the policy and economic instruments that can be put in place to limit the growth of energy demand and CO2 emissions in this sector in the Chinese economic and institutional context? Based on a prospective modeling exercise, we examine different strategies for controlling energy demand in buildings and their economic costs in a Chinese city by 2030. Our quantitative analysis in the first part of the thesis shows that the application of the current thermal standards in the building sector in China not only does not achieve an optimal level from the societal point of view, but would also be the most costly choice in the long run among the technical options available today. We therefore propose that thermal regulation be significantly strengthened. Several economic and political instruments are analyzed in the second part of the research. We develop three main models to accompany the learning of more efficient technologies and the transformation of the building sector: 1). Implementation of carbon financing through the integration of the Kyoto Protocol's Clean Development Mechanism in the building sector. 2). Flexibility of land use regulations in the development of the city's urban plan . 3). Creation of an economic incentive to facilitate the third-party financing of energy management actions in buildings, especially through the involvement of heating companies. In this respect, the district heating tariff reform must be completed.
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