Supportive governance for city-scale low carbon building retrofits: a case study from Shanghai

Abstract

There is significant potential for reducing energy use and emissions from buildings through energy efficiency retrofits. However, a number of barriers, including long payback periods and uncertainties around business models and technologies, restrict large scale implementation. A recent joint project, piloting green energy schemes and low-carbon investments in public and commercial buildings in the Changning district of Shanghai, China, indicated opportunities to break through these barriers. This study conducted a cost benefit analysis to investigate how an innovative combination of financial and non-financial supported retrofits, and could serve as a model for other urban areas. In total, 44 retrofit sub-projects were carried out and achieved energy savings of 30,217 tons of coal equivalent. The average payback period was 2.43 years, and with subsidies was further reduced to 1.79 years. The Changning Low Carbon Office played a critical role in coordinating and supporting the uptake of retrofit measures but non-economic factors continue to restrict investment by financial institutions and the implementation of retrofits on a larger scale. Key policy insights Public and commercial building retrofits in Shanghai are found to generate commercially acceptable payback periods while having achieved significant energy and emissions reductions. Subsidies from the city and district governments significantly reduced the payback periods of energy efficiency retrofits, but may also crowd out investment by financial institutions. The Changning Low Carbon Office has coordinated energy efficiency retrofitting efforts, provided access to information, helped to connect investment funds with project opportunities and support project management. Achieving the deeper retrofits needed to achieve China’s climate targets may require more substantial financial incentives.