Christian has kindly offered me, Constant Van Aerschot from Lafarge, one of the two co-chairs of the EEB project, a guest spot here to report on the project's recent review with our CEOs in Washington DC.
In one respect it was a stark contrast to the Assurance Group meeting in Tokyo, which Christian reported on last time. In Tokyo, air conditioners are set to cool only to a minimum of 28 o C – and it felt much warmer in the meeting room. In Washington, on the other hand, it was so cold that we couldn't work inside the hotel when we were preparing for the meeting! The air conditioning was set unbearably low, so we went outside where we were comfortable.
In other respects this meeting was very similar to that of the Assurance Group. It was a very important milestone at which we received feedback and direction, and it was very positive.
Bruno Lafont, LAFARGE CEO and Chairman, and George David, Chairman of UTC, led the review. Several other project companies were able to participate: Roberto Tellarini, CEO of Actelios/Falck and senior executives representing the CEOs of ArcelorMittal, DuPont, EDF, Philips, Skanska and TEPCO. (Unfortunately, the CEMEX representative couldn't make it because his flight was cancelled following extreme weather conditions in Mexico.)
They offered strong support for the EEB project and promised another high-level review before the next report is released. They were pleasantly surprised by the level of visibility the project has achieved so far: more than 54,000 report downloads and a growing EEB presence in conferences: 16 events in 2006, 38 in 2007 and an expected 50 in 2008.
The CEOs perceive our work as being truly unique, thanks to our bottom-up approach and business focus. It contrasts – and complements - the top-down approach taken by other organizations such as the IEA, UNEP, and the Vattenfall/McKinsey reports. Their top-down (macroeconomic) approach only shows WHAT should theoretically be done. They suggest that a carbon tax of around US$ 30 a ton should be enough of an incentive for home owners to retrofit their dwellings or for developers to build more energy-efficient houses. Our early modeling results challenge this view.
In contrast, our quantitative bottom-up approach explores HOW energy savings and CO 2 reductions can be achieved. In particular, we are able to quantify the necessary behavioral, technological, economic and political measures, and the resulting costs and benefits for stakeholders such as investors, property owners or managers, governments, etc. Our selected submarkets – single and multi family homes and offices in China, France, India, Japan and the USA, cover around 50% of the world's energy use in buildings, making our results highly relevant both globally and locally.
We shared very interesting figures from some of these sub-markets during the meeting, looking at the energy issue from both the supply and the demand side.
The feedback we got in Washington was that we are “sitting on a pile of extremely valuable information”. It means our next report will have an important impact on today's energy agenda, future business models and building sector policies.
My top conclusions from the review are:
- The project is on the right track and has the potential to produce a groundbreaking report
- EEB has produced an excellent set of qualitative and quantitative data
- A series of strong measures might be needed to overcome the inertia to refurbish existing buildings within a meaningful timeframe; it will therefore be crucial to craft the right positive messages and recommendations
- Even though the problem is complex, our communications need to be easy to digest
- It is important to keep distinguishing between developed and developing countries and to find the right balance for the recommendations
- EEB should continue to cooperate with IEA, UNEP and other actors to share results and thinking.
The next step will be an important 3-day project meeting in Paris at the beginning of September. There, I expect the group to draw conclusions and prepare recommendations based on the model results and the qualitative submarket assessments. In the meantime we are organizing, expert workshops on the holistic approach, behavior and finance to further feed our thinking.
During the trip to Washington the complexity and contrasting business responses to energy demand were driven home for me by two contrasting approaches. On the one hand, I saw a utility company promising that it would supply the energy necessary to meet 30% demand increase that Americans are forecast to use by 2030. On the other hand, I saw in Europe an advertising campaign with the opposite message: “Energy is our future, let us save it”.
This illustrates the different business mentalities. For EEB to be successful, we need to see much more of the latter. That is essential to achieving serious progress towards our vision of zero net energy buildings.
Back to Christian next time for more on how we are working to achieve that vision.
Constant van Aerschot
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