Mitigation Initiatives and Opportunities in

Urbanizing Asia: Buildings and Transport

Sectors

Maricor D. Muzones
Freelance consultant, Philippines

Second Regional Consultation Meeting

Economics of Climate Change and Low Carbon Growth Strategies in Northeast Asia
11-12 October 2010, Ulaanbaatar
Outline

1. Background paper : a quick overview

2. Urbanization trends in Asia and impacts on climate

3. Mitigation initiatives and opportunities- a glimpse on some good

practices

4. Barriers at the end-users level

5. Way forward: some thoughts

1. Background Paper: A Quick Overview (1)

 With urbanization  changing consumer preferences  increase in

energy use

 Most strategies promoting sustainable energy futures have dealt with

technical solutions such as switching from fossil fuels to renewable
energy

 Improving energy efficiency alone may not be as effective in reducing

energy demand as generally assumed due to the “rebound effect”
creates a net effect of increased energy use
Background Paper: Quick Overview (2)

Explores the link between sustainable consumption and climate

change in light of the following considerations:

 Cost - policies promoting sustainable lifestyles and behavior

comprise many of the world’s low cost mitigation opportunities

 Time - timely if not early action in these 2 sectors is critical to

avoid lock-in of unsustainable development and to avoid a
“lock in” into unsustainable lifestyles and systems of
services provision

 Temperature - the transformation of energy consumption in

these 2 sectors will be crucial to help keep global temperature
rise within 2 degrees Celsius above pre-industrial temperatures.
2. Urbanization trends in Asia (1950-
(1950-2030)

Between 1950-2005,
world`s urban
population expanded
from 29% to almost
50%

By 2030, estimates

show that proportion of
population living in
cities will reach 61% ,
an increase of nearly
1.8 billion most of them
in Asian developing
economies.
Urbanization trends suggest a dramatic increase for
energy services in the region

 As the fastest growing economic region underpinned by large

scale urbanization, changing consumer preferences in Asia are
driving much of the increase in energy use

 The resulting GHG emissions stand in contrast to the levels that

science suggests are necessary to properly address climate
change-

 Rapid growth of new buildings in developing countries and the

low rate of replacement of energy-inefficient buildings are major
contributors to emissions from this sector.
Example: Consider China, where buildings account for more
than 25% of the country’s total primary energy consumption
and responsible for a quarter of its annual GHG emissions, is
estimated to have a proportion of urban population of 60% by
2030, up from the current estimated 40%.
Buildings are responsible for almost 40% of
global energy use and about 30% of global GHG
emissions
CO2 emissions from buildings, 2004
Management of energy end-
end-use level: crucial in
reducing energy use and in reducing emissions
Using a life cycle approach, trends show that the operational phase of a
building by far accounts for the greatest proportion of energy use

Life cycle phases of buildings (Graham 2003)

Transport accounts for nearly a quarter of the world’s
CO2 emissions from fossil fuel combustion and 13% of
overall GHG emissions.
Developing Asia contributed 0.75 gigatonnes or 14% of the
world’s total transport-
transport-related CO2 emissions. By 2050, it is projected
to reach 30%.

Total CO2 emissions from the transport sector (2000-2050)

Transport emissions is a function of the volume of
transport activity, amount of energy by each type of
activity, type of fuel used to generate that energy, and
the mix of modes

 1970-2005: global transport-related GHG emissions grew

130% (much of the recent growth coming from a rapidly
motorizing Asia (IEA 2008)

 THEREFORE, the way Asia’s policymakers manage these 4

variables- particularly energy consumed by type of vehicle
and the amount of overall vehicle activity- will influence future
emissions.
Example: An 18% improvement in per unit energy
consumption will not be enough to offset an anticipated 123%
increase in transport activity for light duty vehicles by 2050.
(WBCSD). This is particularly relevant for Asia since for
example in China, vehicle stocks is expected to increase from
37 million in 2006 to 270 million in 2030 (IEA 2007)
4. Mitigation initiatives and opportunities-
opportunities- a glimpse
on some good practices
Why in buildings?
 UNEP 2009: buildings sector has the greatest potential for
delivering GHG reductions and at the least cost using currently
available technologies;
Levine et al 2007: there is a global potential to reduce
approximately 29% of the projected baseline emissions by 2020
cost-effectively in the residential and commercial sectors, the
highest among all sectors studied; estimated energy savings of at
least 75% is expected to come from new buildings through a
systems approach application in building design and operation;
McKinsey 2009: economically and technically feasible to reduce
global emissions by 35% from 1990 levels and 70% from 2000
levels by 2030 to keep the world within a 2-degree increase of pre-
industrial temperatures
The good news: buildings sector has highest
economic mitigation potential
Estimated economic mitigation potential by sector and region
Low cost reductions from sustainable consumption
Low cost mitigation potential (selected countries)
Mitigation opportunities: buildings (1)
 Power use in buildings – voluntary programs, building and
appliance standards and labels (instituted in 60 developed and
developing countries for appliances), educational programs, best
practice and benchmarking programs, state market transformation
programs, financing, and public sector procurement.
Examples:
U.S. - more than 40 household appliances are subject to federal
mandatory and/or voluntary energy performance standard;
Japan – Energy Efficiency Law (pertinent to buildings, targeting
design stage and operations stage); Top Runner Program ;
Acceleration of Zero-Emission Buildings (ZEB)
China- has also implemented minimum performance requirements
for air conditioners and refrigerators the past several years; China’s
regulation on energy conservation on civil buildings, certification
process of green buildings by the Ministry of Construction and the
International Leadership in Energy and Environmental Design
(LEED) label
Mitigation initiatives: buildings (2)
 Public sector procurement – one of the largest
sources of end-use consumption and can help drive
economies of scale early in the deployment of new
technologies.
Examples: Agreement on Government Procurement by
the WTO (serves as a model for purchasing efficient
appliances used in public and government buildings;
China, Korea and Japan have already implemented
strategies for purchasing energy-efficient goods for
government use (green procurement)
 Closer working relationship between national and
local governments for effective policy implementation,
eg. China’s implementation of urban district heating
reform in northern cities
Mitigation initiatives and opportunities : transport (1)

Emission reduction from the transport sector can be achieved by:

a) reducing unnecessary travel through land-use planning, congestion charges
and non-motorized transport;
b) Shifting or retaining mode share of mass transport; and
c) Improving energy intensity through fuel switching or fuel efficiency standard

 Many Asian cities have the advantage of high-density and

mixed-use environments, reducing distance travelled and
energy use; many have high levels of non-motorised transport
(walking and cycling)
 Several cities in the region have reduced transport energy with
land use planning, eg. Singapore with a plan for compact city
in 1971 and through road pricing schemes in 1990s, has
limited growth in energy-intensive personalised transport.
Mitigation initiatives and opportunities –transport (2)

 Shanghai’s innovative license plate auctioning system –

brought the number of vehicles to one-sixth the level of auto-
friendly Beijing

 An increase in the bus rapid transit (BRT) programs (about 30

in Asia in 2009)

 Light rail and metro rail in developing Asia’s densely

populated cities, eg. Delhi Metro credited for serving 2.26
million passengers daily and mitigating an estimated 38,000
tonnes of CO2 annually since completion in 2006

 Scaled up improvements in public transport, eg. Jawaharlal

Nehru National Urban Renewal Mission in India- a
government-initiated program to allocate approx. US$25
billion to urban development projects in 63 cities from 2005-
2012
Sustainable consumption in the transport
and in buildings-
buildings- some policy samples
Sustainable consumption policy initiatives in buildings
 4. Barriers at the end-
end-users’ level: buildings

A. Lack of consumer choice- for buildings already built; the principal-

agent (PA) problem arises when investors who put in money to improve
efficiency do not necessarily receive the benefits of energy saved
( when landlord pays for improvements and tenant pays for energy bills,
investment will not be made). An opposite PA problem arises when
energy bills are paid by the landlord, leaving the tenant with no
incentive to moderate energy use.

B. High initial consumer costs – while many investors may realize the
long-run savings through efficiency, improvements require substantial
financial resources which investors may either not have adequate of, or
no access to financial institutions for that purpose.

C. Lack of consumer awareness- lack of relevant information available

for consumers; lack of building standards and labeling for appliances
building developers and appliance manufacturers need to communicate
the potential contribution to financial savings and reduced emissions
through their products
Barriers at the end-
end-users’ level: transport
A. Lack of consumer choice-
 declining public transport share across cities in developing Asia
amidst a sharp increase in travel demand; growing concerns re.
improvements in public transport service and quality, eg. in India, a
dedicated city bus service operates in only 17 of the country’s 35
cities with populations over one million; other concerns include
affordability for low income segments of the population

 when innovative modes do not perform as well as initially

anticipated, eg. While Jakarta’s BRT program’s first line has
become popular, the project’s other lines have had lower
occupancy rates and saved less time and energy; other examples
include the operational issues on Delhi’s BRT on a 5-km pilot line
have led to that portion of the road being called the “corridor of
chaos”
Continued…transport

B. High costs- particularly challenging in countries with rapidly

urbanizing poor populations as in the case of Delhi, India
witnessing a sharp increase in urban migrants who settled
outside the planned zoning the past 2 decades despite the
development of a master plan which encouraged mixed land
use planning in 1990; affordability issues in the Delhi metro;

C. Need to enhance consumer awareness -need to sensitize

populations to transportations costs and increase awareness
of energy savings, eg. Indonesian government’s subsidy cut
on premium gasoline and diesel by approximately 30% and
utilized a public education campaign to explain the full costs
to the public, causing others to drive less; other examples
include the Jakarta car-free day an annual event which began
in 2002 followed by Surabaya, Bogor and Yogyakarta.
5. Way Forward-
Forward- Some thoughts

1. Consumers
 addressing consumers’ lack of awareness through policies that
educate the public on the benefits and impacts of their choices are
effective tools eg. eco-labeling such as Japan’s energy saving
labeling program since April 2006 applied to 13 products; provision
of eco-points for purchase of eco-friendly products
 the use of the life cycle approach (LCA) – a powerful tool to help
compare the consequences of choices in line with their values and
preferences and help increase awareness for such products;
 addressing high capital costs associated with making the right
consumer choices for green products, eg. government program or
rebates, incentives
 need for a carbon price to reflect true costs
2. Producers
 encourage and help producers through a set of incentives to mass
produce sustainable products eg. subsidies; penalties may also
help sway producers away from older, unsustainable technologies in
these two sectors
 assist and take part in the growing movement of CSR as a driver
also for consumers to improve both the environmental and social
impacts of their consumption
 eco-labeling policy initiated on the production side forcing
manufacturers to innovate their process for greater efficiency and a
tool to build up an environmental image among consumers
3. Government
 infrastructure and urban planning and policy implementation
 practice good governance, the lack of which has led or can lead to a
lock-in into carbon intensive practices and patterns of unsustainable
consumption in buildings and transport sectors
 promote government agencies’ green purchasing
 employ co-benefits approach in evaluating policy options
Muzones, Maricor, Eric Zusman, Frank Hiroshi Ling, Hitomi Kimura
and Takuro Kobashi. 2010. “Sustainable, Low Carbon Buildings
and Transportation: Climate Imperatives in Urbanising Asia”.
Sustainable Production and Consumption in the Asia-Pacific
Region: Effective Responses in a Resource-Constrained World.
Institute for Global Environmental Strategies (IGES): Japan.

CCICED Policy Research Report 2009. Energy Efficiency and

Urban Development (The Building and Transport Sectors

Sakamoto, Toshi (METI Japan). “Overview of Japan’s Energy

Efficiency Policies on Buildings and Appliances”, October 2009.
Thank you