21 November 2018
In the last decade, the Chinese government has implemented multiple policies to promote sustainable buildings. Among others, public financing provides a major incentive for various actors to improve building energy performance and construct green buildings. However, it is evident that subsidies alone are far from sufficient to mainstream sustainable building refurbishment and development in China. Green financing channels and tools are essential for attracting private investment to fill in the immense financial gaps. At the same time, green financing is becoming a mainstream theme globally for both financial institutions and policy makers, and has developed rapidly in China. So far, the building sector has received far less attention than other sectors.
Against this background, the Wuppertal Institute hosted the Forum of Financing Sustainable Buildings within the framework of EU Switch-Asia SusBuild project on 15th November 2018 in Chongqing (China), in collaboration with the China Association of Building Energy Efficiency (CABEE), the Sino-German Urbanisation Partnership, and two SusBuild local partners. This Forum gathered about 80 participants from the building sector and financial institutions in China as well as European and other international organisations to discuss how green financing can support sustainable building development in China in the future.
The Forum was divided into three sessions. The representatives from the Ministry of Housing and Urban-Rural Development (MoHURD) and the China Association of Building Energy Efficiency (CABEE) opened the conference, introducing the trend of green buildings and building energy efficiency in China and stressing the importance of financing. The opening speeches were followed by three keynote presentations of experts from Chongqing Association of Building Energy Efficiency (CQBEEA), Central University of Finance and Economics, and International Partnership for Energy Efficiency Cooperation (IPEEC). The keynote speeches highlighted the importance of building energy efficiency, the current practice in Chongqing, and innovative financial instruments that can potentially scale up financing for sustainable buildings.
The second session invited experts from both financial institutions and building sectors to share insights from their practices. Domestic financial institutions, such as Industrial Bank, Pudong Development Bank, and local banks in Chongqing introduced their current practices of green financing related to sustainable buildings and the challenges they are encountering. Building experts from Chongqing, Shanghai, Qingdao, and Yunnan Province presented energy efficiency retrofitting projects, their local policy framework, and challenges of accessing to financing. Some projects and policies address the concerns of financial institutions, for example, improved information disclosure through a monitoring platform.
During the third session, experts from national and international organisations, such as UNEP FI, the Wuppertal Institute, Guangzhou Carbon Emissions Trading Centre, CECEP consulting, and CABEE, presented innovative instruments supporting financial institutions in financing sustainable buildings. These instruments include standardised procedures, green mortgages, green stock indexes, green bonds, and facilitator organisations. Mr. Felix Suerkemper, Project Coordinator at the Wuppertal Institute, presented the key role of facilitators among building owners, financial institutions, and ESCOs in enabling ESCOs’ access to finance. These and further instruments are part of the SusBuild handbook “Unlocking ESCOs’ access to finance to boost building energy renovation” which will be published beginning of 2019.
The consensus of the Forum is that financing for sustainable building development is still at an early stage in China. Its upscaling is of vital importance and will require paradigm changes of different stakeholders as well as an effective combination of policies and innovative mechanisms including not only financing products but also more information for energy efficiency investment performance. The Forum was first of its kind in Western China and brought various key actors from the building sector and the financial sector into dialogue and thus paved the foundation for further collaboration in the future.