China’s water crisis

Severe water shortage and pollution problems have affected China’s economic development and citizens. 

Some of the problems are highlighted in a recent article by the People’s Daily: ⁽¹⁾

§  UP to 40 percent of China’s rivers were seriously polluted last year after 75 billion tons of sewage and waste water was discharged into them

§  20 percent of rivers were so polluted their water quality was rated too toxic even to come into contact with

§  Nearly 300 million rural residents lack access to drinking water

§  The per capita of water resources is only 2,100 cubic meters annually, or about 28 percent of the world’s average

§  About two-thirds of Chinese cities are ”water-needy”

Any regulation that tries to protect the water would likely come in the expense of economic development. 

The government of Nanning, the capital city of Guangxi province in Southern China, pledges to compensate residents along one of China's most scenic rivers whose livelihoods have been affected by new rules to protect the waterway.

The regulations are adopted to protect the 437-kilometer Lijiang River in Guangxi’s autonomous region of the Zhuang Nationality. The rules, which ban fishing, private rafting and restaurants along key sections of the river, are expected to set a benchmark of protecting overexploited tourism resources in China.

Rafts scattered at a harbor in Xingping township, the Guangxi Zhuang autonomous region, January, 2012. (China Daily Photo)

The government plans to invest 4 trillion yuan (US$634.9 billion) in water conservationprojects over the next 10 years, of which 1.8 trillion yuan will be spent during the2011-2015 period.

Convincing the Chinese government to sacrifice economic and industrial development to conserve the environment is no easy task.  Achievements such as above did not come without a strong push from NGOs such as Green Water, and the IPE (Institute of Public & Environmental Affairs).

Although it is nice to see NGOs stepping up for the water problem, the effort is not enough.  Like carbon trading, water trading is a new idea that is forthcoming.  Water trading, also called water access right, is for user the trade on the right to use water resources.  Financial institutions and international institutions can team up and set examples of water trading in China.  It is always hard to start something completely new.  It can start with a voluntary program, and gradually steer it into a mandatory one for those companies who rely heavily on water resources.

1.       http://english.people.com.cn/90882/7732438.html

Why is Green Mortgage important to promote Green Buildings and how to make it work?

A green building usually costs 20-50% more than its conventional cousin.  Homebuyers would undoubtedly ask themselves questions such as: “Is this building worth of the extra bucks?”, and “Why should I spend the additional money on the green features instead of a larger place or some fancier furniture?”  It is hard to convince many homebuyers that the additional cost to acquire the green homes will take 5 to 10 years to break even.

Traditionally, green buildings are only for those who are trying to make a statement or branding purpose, both of which belong to the wealthier ones in the social hierarchy.  How can we make them more affordable and attractive to the typical homebuyers?

Mexico has developed a set of policies and measurements to promote green buildings.  The strategy is to provide financial instruments such as additional credit lines for mortgages on properties that feature sustainable and energy efficient technologies, and subsidizing property developers who achieve certain energy efficiency criteria.

A green mortgage extends a larger loan than conventionally permitted to a borrower or a discount due to energy-efficiency improvements.  A more energy-efficient building means less utility bills and greater disposable income for the green building buyer.  For example, a person is approved for a $1,600 monthly mortgage for a conventional building under his/her current credit situation should be able to get an approval for $1,700 for a green building if the green building is able to decreasing the utility bills from $300 to $200.  This would increase the homebuyer’s ability to repay the mortgage.

By the same analogy to the feed-in tariff to the solar power generation industry, the government can consider a ‘feed-in tariff’ for the green buildings in the form of a subsidized interest rate.  It would consequently increase the purchase power of green homebuyers. 

Let’s look at the combination of the two ideas above.  For example, for $1,600 per month with a 5% interest rate, a 25-year term, and 20% down payment may allow a homebuyer to buy a $380,000 home; however, for $1,700 per month with a 4% interest rate, a 25-year term, and 20% down payment may allow the green homebuyer to buy a $500,000 green house.

Going a bit outside of the traditional mortgage calculation (which may incur some marginally credit risk from the mortgage provider’s side), and some support from policy makers, green buildings can be more affordable to typical citizens.

Is your building green?

Green Buildings are generally perceived as a product of the developed world or high end clients in developing countries to show there green credentials, in other words for those who can afford the extra costs of Green Building features.

Going green in the building sector can save investors serious money through lower energy and water bills. Understanding this, both investors and policymakers alike are recognizing that greener buildings can provide multiple benefits:

• saving operating costs by boosting efficiency,

• reducing a community’s carbon footprint through lower greenhouse gas emissions, and

• generating jobs through home-grown innovation

Low income families in developing countries pay a significant proportion of their household earnings in utility bills. For example, in Colombia, families pay close to 20% of their household income for energy and water.  Globally, 400 million homes are predicted to be built by 2020 most of them will be in emerging markets. This places tremendous pressure on governments to supply energy, water and demand for building materials.

As emerging markets aim for a low carbon growth, tackling buildings is critical as most of the low cost carbon abatement measures are in the building sector.

It is proven that green building energy use can be reduced by 20% with little impact on the overall cost of construction.

Why are Green Buildings important?

Urbanization

70% of the world’s population will live in urban areas by 2050 (today 50%); 1 in 3 will live in urban areas in Africa & Asia.

The emerging middle class – with rising income levels – is growing by 90 million per year.  To meet this demographic change, increased employment opportunities will have to be generated in urban areas - requiring additional commercial buildings.  Buildings of almost every type represent necessary, long-term development infrastructure, yet present a real danger of locking in inefficiencies for decades if constructed unsustainably.

Demographic Trends

The world will reach 9 billion by 2050; poor countries will double in size.

Age is a significant factor; emerging market populations are creating a huge demand for homes that need to be affordable and green.

Climate Change

Current GHG Emissions: Buildings account for 15% and are one of the fastest growing sectors. IPCC estimates building-related GHG emissions to double by 2030 under a high-growth development scenario.  This increase would take place almost entirely in the developing world.

Reducing climate change requires investments/innovation in energy efficiency and renewable energy.

Green Buildings are not just for the wealthy, they are important for all.

The Fight of An Island

Whether it is Diaoyu Island as the Chinese call it or Senkaku Island as the Japanese call it, it is there with a lot of stories.

The recent tension and all the disputes about this island have captured the spotlight of international media.  They stem from the 9-18 memorial that represents the date when Japanese invaded China. 

After Japan was defeated in WWII, Japan exited China except for this small island.

Geographically, the island locates closest to Taiwan, than to Mainland China, and Japan.  Taiwan and China have never collaborated so closely with each other than before since the communist party declared the establishment of People’s Republic of China in 1949.

The last time when Communist Party and Kuomin Party collaborated was when they were fighting together against the invasion of Japanese into China.  After China’s victory, Communist Party and Kuo Party fought against each other, which ended of Communist staying in mainland and Kuomin Party relocating to Taiwan.  Both parties claimed to have the right to govern China and made their independent political decision.  For example, Mao Zedong of the Communist Party agreed to the independence of Mongolia, but Chiang Kai-Shek declined to accept the legality of such decision.  It’s very interesting to see that the map of China in mainland shows only mainland China, Hong Kong, Macau, and Taiwan, but the map of China in Taiwan still shows all the above regions plus Mongolia.

Taking a deeper look into the island - since the end of WWII, it has been controlled by Japan because Japan saw the conflicts between mainland and Taiwan, and took possession of the island although it is farthest from the island in the three entities that claimed to own it.  It is only this year when Japan tried to ‘nationalize’ the island by ‘purchasing’ it from a private Japanese ‘owner’ of the island, mainland China and Taiwan got angered and collaborative again.  

The more intriguing cause of the dispute can be the fact that the natural resource that is covered by the island is worth as much as US $700billion.  No oil and gas company dares to explore in the off-shore area around the island yet because of the political instabilities.

It remains unknown whether the UN would step up and solve the disputes according to international laws.  It will not be the end of dispute no matter what the UN decides because none of mainland China, Japan, or Taiwan would agree with the outcome at the same time.