Towards a green economy Box 2: Residential construction in China Base case
Growth in energy use 2005-2050 Incremental cost per year
Space heat energy savings Value of energy savings per year
Multi-family new building construction in China Green development
~ 530 billion kWh/yr NA
NA NA
~ 305 billion kWh/yr ~ US$ 12 billion
76% About equal to costs on annual basis
In China, the demand for multi-family dwellings will continue to grow rapidly owing to rural-urban migration and rising incomes. Between 2010 and 2050, the World Business Council on Sustainable Development (WBCSD) estimates electricity demand in multi-family buildings will increase by 200 per cent for lighting and 325 per cent for appliances. Current building practices are characterised by poorly designed and insulated building envelopes and inefficient heating systems, while energy for heating is priced at a fixed rate irrespective of consumption. Analysis by WBCSD (2009) looks at the impact of improving the efficiency of typical blocks of multi-family buildings in China (a six-story building containing 36 apartments) over a 45-year period spanning 2005-2050.
The table shows the impact of a 76 per cent improvement in building energy efficiency through a series of design and management interventions, including a better-designed and insulated building envelope, apartment-level temperature controls and electricity sub-metering.
If replicated at a
national level across China, these steps could lead to a total saving of about 225 billion kWh per year, or US$ 12 billion per year at current electricity prices. However, although substantial building energy savings are achieved, the growth in national building stock in China will outpace the efficiency improvements, resulting in a net increase of 305 billion kWh per year in energy demand over the given time period. Source: WBCSD (2009)
inspections by accredited experts). An impact assessment was recently conducted of the directive, which came into force in 2002 (Haydock and Arbon 2009). The study concluded that a reduction of 5-6 per cent of the EU’s final energy demand, with 60-80 Mt of energy savings per year, was possible. This accsounts for 4-5 per cent of the EU’s CO2 210 Mt CO2
emissions. It showed that savings of 160- /year can be achieved by 2020, along with the
creation of 280,000-450,000 new jobs. This confirms that greening costs are low compared with the mid- to long- term benefits. Moreover, abolishing the EPBD’s current 1,000 m2
compliance threshold could yield an additional
€ 25 billion energy cost savings per year by 2020 at an additional capital investment cost of € 8 billion per year – an overall negative CO2
abatement cost (EC 2008).
3.3 Economic, environmental and social impacts
Energy benefits The primary benefit of green buildings is the reduction in tenant energy costs through improved energy
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In its 2009 World Energy Outlook, the IEA estimated that US$ 2.5 trillion additional investment in green buildings globally between 2010 and 2030 would yield US$ 5 trillion (undiscounted) in energy savings over the life of the investment. A study by the World Business Council on Sustainable Development (WBCSD) found the potential for US$ 150 billion a year of green building investment in the USA, EU, Japan, China, India and Brazil where energy cost savings would pay back the additional upfront investment in less than five years. An additional US$ 150 billion a year of investment would pay back within
efficiency. McKinsey estimates that in the United States of America, US$ 229 billion of investment in residential energy efficiency between 2009 and 2020 would yield US$ 395 billion in energy cost savings and reduce overall residential energy demand by 28 per cent. In commercial buildings, US$ 125 billion in investment would reduce energy demand by 29 per cent and yield energy cost savings of US$ 290 billion (Granade et al. 2009). In developing countries, the firm estimates that US$ 90 billion in energy efficiency investment would reduce energy expenditure by US$ 600 billion (McKinsey 2010).