Thursday, March 26, 2009

Two-Pronged Approach for Greening China’s Buildings, Part 1: The LEED Snowball

This is the first of a three part post on my "two-pronged approach" for greening China’s buildings. The two-pronged approach consists of both a bottom up and a top down strategy for transforming the market for green buildings in China. The first post will focus on how China has achieved its success with LEED buildings thus far and what this says about market transformation. The second post will describe the need for bottom up green leadership by real estate developers and describe some policy steps to encourage this. The third post will make the case that particularly in China, this bottom up approach is not nearly enough and introduce a top down approach to supplement the bottom up approach.

LEED in it’s current incarnation is most certainly not the end goal of the green building movement. LEED doesn’t go nearly far enough: even if every building globally achieved the 33% energy savings common in LEED buildings, the world would still be far from achieving the CO2 emission reductions needed to forestall the worst effects of global warming. However, LEED has been an important stepping stone in the journey toward a green built environment. Importantly, LEED has provided a good real world case study in how to successfully transform parts of the real estate market. By studying how LEED transformed the US real estate market and parts of the Chinese real estate market, we can better design a plan for transforming the rest of the Chinese market and achieving the vision of green buildings for everyone, everywhere.

The LEED snowball
LEED has seen massive growth in the US and globally. LEED registrations, i.e. projects committing to seek LEED certification (and paying money to say so), grew from 1000 in 2006 to over 20,000 in 2009. The Green Building Impact Report estimates that "new construction sector penetrations [are] approaching a whopping 40%." This seemingly unstoppable growth is a lot like a snowball rolling down a hill. MIT’s Peter Senge describes the snowball concept in his recent book The Necessary Revolution:
Snowballs arise from an underlying system structure where change feeds on itself to produce more of the same, and soon it snowballs into a pattern of self-reinforcing growth.
The underlying system structure of the market for LEED-rated green buildings is a snowball with two parallel and complementary feedback cycles that drive growth.

The first cycle is the demand side. As more green buildings are built, tenants begin to occupy that space and benefit from the green features. As these benefits become publicized and more widely understood, more tenants demand green buildings. Thanks to increased demand, developers build more green buildings. The cycle builds on itself, and the result is more green building.
At the same time, there is a parallel supply side cycle. As more green buildings are built, developers and builders begin to learn how to make green buildings better and more cheaply. As a result, more tenants can afford green buildings and therefore demand for green buildings increases. This cycle also builds on itself, and the result is more green building.
More importantly, these two cycles reinforce each other and will eventually result in green building becoming the standard in the market place. The result of this snowballing growth then is nothing less market transformation. The snowball feedback loop helps explain the explosive growth in LEED building. In other words, once the snowball gets big enough, nothing is going to stop it from rolling down the hill. This holds true not only in the US, but also in Tier 1 Chinese Class A markets like Beijing and Shanghai. The same dynamics even seemed to be at work in Dubai before its real estate market collapsed.

The need for snowballs
Interestingly, LEED has achieved this snowballing growth from the bottom up. LEED filled an unmet need in the market place and was able to tap a nascent demand for better, healthier and greener office space. Although the federal and state governments certainly played a role in helping LEED along in the US, the heavy lifting was really done from the bottom up. And in China, besides the Ministry of Science and Technology’s role in Accord 21, almost nothing was done on the part of the government to promote LEED, which illustrates just how thoroughly bottom up LEED’s growth has been in China.

In my next post, I will build on these principles of snowballs market transformation to introduce the “bottom up” approach to achieve snowballing growth in the Chinese building markets that are currently being left untransformed.

Tuesday, March 17, 2009

Green Buildings for Everyone, Everywhere: How China Can Achieve This Vision

I was recently in Hong Kong and Macau at the Fulbright midterm research conference. When talking with my fellow Fulbrighters, I was often asked to describe my research findings about green buildings thus far. This event was a great chance for me to reflect upon what I’ve learned about green buildings during my time in China. Sometimes in the course of focusing on specific topics on my blog, I lose track of the bigger picture. This post will describe the key findings from my research so far: while China has made progress with green buildings, it hasn’t gone nearly far enough. I will focus the rest of my time here on finding solutions to how China can realistically tackle the many barriers to green buildings and achieve a vision of green buildings for everyone, everywhere.

Buildings are huge polluters
When people imagine the chief causes of greenhouse gas emissions in China, many think of coal power plants. While true on the surface, this popular perception misplaces the real blame. After all, where does that electricity produced by coal power plants ultimately go? To power buildings, primarily. The reality is, the energy used in buildings- both in their operation and construction- represents almost 45 percent of China's total annual energy use and a similar share of China’s greenhouse gases. This means that buildings in China alone account for more greenhouse gas emissions than all of Japan and Russia, combined. In addition to greenhouse gas emissions, buildings also consume large amounts of land, water and material resources.

More and more buildings
The environmental impact of buildings is growing rapidly. According to McKinsey, China will have one billion urban residents by 2030. Providing housing and employment for the urban billion will require China to continue its unprecedented construction boom. The result will be an estimated 40 billion square meters of construction between now and 2030, spread over 5 million new buildings.

Although China currently boasts one of the lowest building energy uses per capita, this is quickly changing for two primary reasons. First, as incomes rise, Chinese are demanding more and more floor space per capita. For example, floor area per capita in Beijing doubled from 2001-2006. The result is more buildings and therefore more energy use per capita.

Second, as services like heating, cooling and hot water become more common, each square foot is using more energy. According to Lawrence Berkeley National Labs, only 20% of office buildings nationwide had cooling in 2000. By 2020, this is expected to nearly triple to 55%. The result will be much more energy use per square meter. For example, highly-developed Shanghai’s energy consumption per square meter increased 31% from 1998 to 2005 thanks to a mix of increased energy use for heating, cooling, lighting and water heating. As other cities and provinces catch up with Shanghai and demand similar levels of comfort, this will result in continued increases in energy intensity nationwide.

When this data is coupled with the growth in overall floor area, the energy use and greenhouse gas emissions scenarios for China’s buildings look bad. Add to this mix the fact that inefficient buildings built today will continue to pollute and use energy for 40+ years, and the situation is downright scary.

LEED Silver lining not nearly enough
Despite this dirty and worsening picture of China’s built environment, there is a small bright spot emerging: the number of LEED-certified high performance green buildings in China is growing rapidly.

LEED-rated buildings can save significant energy, water, and materials resources and reduce carbon dioxide emissions. LEED first came to China in 2006 when the Ministry of Science and Technology demonstration building called Accord 21 achieved a LEED Gold rating, using 73% less energy than the average government building in Beijing and 60% less water.

Since Accord 21’s completion, LEED has seen dramatic growth in China. As of February 2009, over 118 Chinese buildings had registered to seek LEED certification, and many more businesses have registered their intent to green their offices according to LEED standards. In fact, Rob Watson, an international green building expert, estimates that over 50% of class A office building coming online in Beijing and Shanghai over the next two years will seek LEED certification. This is fantastic news, almost on par with American cities noted for their greenery, like New York or Portland.

The problem is, this high level of penetration is primarily confined to the tier 1 cities. LEED projects have sprouted up in tier 2 cities like Tianjin and tier 3 cities like Wuhan, but most LEED buildings continue to be in the highly developed areas near Beijing, Shanghai and Shenzhen. This is problematic because the vast majority of building is occurring outside of these tier 1 regions. Moreover, the growth in construction in the tier 2 and 3 cities is actually much faster than that in tier 1 cities, meaning more construction will be in these secondary markets in the future.

More worrisome is the fact that LEED buildings are almost exclusively confined to the high-end of the market: Class A office, luxury apartments, and factories owned by multinational corporations. Unfortunately, this does not even come close to covering the entire market. The urbanization statistics shown earlier imply that a significant amount of space is going to have to be created for people who have yet to be urbanized. This certainly won’t be luxury apartment space. And what about for all those companies not ready or willing to occupy Class A office space? While 100+ LEED buildings is promising, this is nothing compared to the 5 million buildings to be built between now and 2030.

Clearly, LEED alone cannot even begin to stem the tide of increasing greenhouse gas emissions and energy use in Chinese buildings. Unfortunately, while the government continues to show strong interest in building energy efficiency programs, I haven’t seen much happening outside of LEED.

What's next
China should not accept this state of affairs. Much, much more can and must be done to reduce the environmental impact of China’s buildings. Green buildings for everybody, everywhere will have to be the goal for China to reduce greenhouse gas emissions and other environmental impacts while making room for unprecedented urbanization.

But how can China spread green buildings to Tier 2 and 3 cities and the countryside? How can China spread green buildings to all segments of the market? How can they do it within the timeframe needed to avoid locking-in future carbon emissions and prevent catastrophic global warming? Most importantly, how can they transform the market at an acceptable cost, or even at a net benefit?

Trying to answer these questions will be the focus of the rest of my blog posts and my research in China.

Sunday, March 8, 2009

Steven Holl Strikes Again- Shenzhen’s Vanke Center Aiming for LEED Platinum

Steven Holl didn’t stop with the Linked Hybrid in Beijing, he is also the architect for the Vanke Center in Shenzhen, a new mixed-use “horizontal skyscraper” aiming for LEED Platinum. I was lucky enough to visit the construction site last week, and this post will describe the unique concept and display some of my photos.

(Quick caveat: most of this info was provided to me in Chinese... I’m pretty good with the language, but I might have missed something...)

“Horizontal Skyscraper” Maximizes Open Space
The Vanke Center, despite being only 35m tall, is one of the largest skyscrapers in the world. It just happens to be horizontal. In fact, if the Vanke Center were stood up vertically, it would be as tall as the Empire State Building. The building houses apartments, condos, offices, and a hotel, and will be the new headquarters for China Vanke, one of the country's largest real estate developers.

And in addition to just looking cool, this interesting form actual has multiple green functions.

Open space
The building essentially has zero footprint on the ground, which creates more space for social interaction as well as more greenery. Although this landscaping could create additional environmental pressures, the designers have thoughtfully minimized this impact through the use of a rainwater capture system. Shenzhen’s wet, tropical climate provides plenty enough rain to keep the plants green, and rainwater gutters on the roof collect this water and use it for irrigation and filling the several fountains throughout the grounds. Moreover, the additional green space means there is more opportunity for rain water to percolate into the ground before running off into local sewers, lessening the strain on municipal water infrastructure.

rain water collection

Second, the raised building creates a cool microclimate beneath it. The building is sited at the foot of a fairly large hill, and the raised structure allows cool breezes from the hill to pass through the open area. This cools the building and reduces the need for air conditioning during the hot Shenzhen summers. It also creates for a more comfortable outdoor experience, encouraging more occupants and visitors to take advantage of the extra open space.

Third, the raised structure creates the largest possible number of views. Since the building’s lowest floor is at the same height as an average building’s third floor, more occupants have views to the outside. When coupled with daylight sensors, this means less energy used for lighting the indoor spaces. Moreover, the raised structure also creates “floorlights” on the first floor, whereby light bounces up from the open space below to provide additional natural light. Significant skylighting on the roof provides additional light, and louvered windows and double-paned glass allow in maximum light while minimizing glare. The result is a highly productive and comfortable space that uses less energy and is better connected with it’s outdoor environment.

"floorlights" to be

windows with louvers shown blocking out glare

skylighting on the roof can replace significant indoor lighting

Fourth, the horizontal design creates much more rooftop space. Holl takes advantage of this roof space in two ways. First, the building has a significant rooftop solar panel installation. These PV panels provide 12% of the power for Vanke’s offices. And where PV panels aren’t installed, the rest of the roof sports a roof garden. This green roof will reduce the building’s cooling load and keep additional rainwater from entering the sewers.

Housing for solar panels

All these green features that flow from the building’s interesting design, as well as a few more interior features like underfloor air distribution and thermal energy storage, contribute to the building’s lofty green goal: LEED platinum. (Note: the building is actually split into 4 different buildings, and only Vanke’s offices will be going for LEED platinum. I’m a bit confused about the split and will try to find out more.) The building was originally scheduled to be completed in mid-2009, but has been pushed back to late 2009 or early 2010. I guess that means the race between the Vanke Center and Parkview Green is on to be the first LEED Platinum building in China.

Vanke Center
Link to full photo slideshow of my site tour

This building represents another step forward for Vanke, one of the biggest developers in China. Vanke was the second company to list on the Shenzhen stock exchange in 1991, and was the most valuable company on the exchange in 2006. It develops residential real estate all over China, accounting for about 2% of China’s residential real estate market. That may not sound like much, but is huge for a market as fragmented as Chinese real estate. As a result, what Vanke does sets a tone for the entire market.

This is not Vanke’s first green project. Vanke has been exploring prefabricated housing to cut down on materials waste, and received an Architectural Record Best Client award in 2008 for their commitment to good design. This makes sense, since Vanke manages all its properties, which gives them incentive to make their properties profitable over the long-run.

Vanke is an established leader in the real estate market, and I think the cutting-edge Vanke Center will really get other developers thinking about how they can implement green principles into their own projects. Cheers to Vanke for pushing the envelope. Let's hope other developers follow suit.