Energy Quota Setting and Cap and Trade Schemes for Chinese Commercial Buildings: A Primer for Program Creation

TitleEnergy Quota Setting and Cap and Trade Schemes for Chinese Commercial Buildings: A Primer for Program Creation
Publication TypeReport
Year of Publication2012
AuthorsThe Natural Re Council
Date Published06/2012
InstitutionThe Natural Resources Defense Council
Abstract

China has made reducing its energy use a major focus of the current five-year plan. In pursuit of this goal, a 20% energy reduction target for the commercial (or public) building space has been set by the central government. This paper seeks to begin answering two key questions. First, how can an energy use baseline, or cap, be set in the commercial building space and; second, what are the key program elements to consider when designing a cap-and-trade incentive scheme for the sector. After examining the strengths and weaknesses of various approaches to understanding building energy use it became clear that operational, or measured, data would be the best option for setting the cap. It will also be shown that applying a cap-and-trade scheme to the commercial building sector is both possible and an idea with considerable merit. The first point is made by the existence of the Tokyo Cap-and-Trade Program, which includes large commercial buildings in its scheme and has operated since 2010. Lastly, the idea of creating incentive schemes for the commercial space should be pursued for a variety of reasons. These range from the sheer volume of the opportunity, which is huge across building types, to China's desire to curb peak load energy use and finally to encouraging markets for new and or emerging technologies. The paper concludes with a discussion of the most promising practices being implemented in cap-and-trade programs around the world including those that do not specifically address buildings.

Notes

CERC-BEE Task 8-2