Green Building Label and Award Scheme

Urbanization levels in China increased from 19% to 47% between 1980 and 2010 and is estimated to achieve 59% in 2025. Green building has been recognized as one of the key development areas in the ‘urbanization and development’ section of the National Science And Technology Development Planning (2006-2020) issued by State Council in 2005.
The concept of ‘green building’ has been introduced to China since the end of 1990s. However, China had no specific standards at that time. Many people thought that green building meant buildings with a large green area, e.g. water gardens, etc. Although some foreign green building standards existed, they did not match the prevailing Chinese conditions.
Since 2005, the ‘International conference on green and energy-efficient building & new technologies and products expo’ (hereinafter referred to as ‘green building conference’) has been successfully organized every year. The China Green Building Council was established in 2008. Meanwhile, many provinces and cities have set up their own green building councils. Since 2008, the Chinese ‘Green Building Annual Report’ has been published every year. These series of activities have enormously expanded the influence of the green building concept in the construction industry and the whole society.

Policies 1-3 are to award prominent exemplary projects, technology and products, as well as organizations and individuals who make valuable contributions to promoting energy efficiency and environmentally sustainable development. The innovation encouraged by this award includes advanced technology deployment, good combination of building technologies and design, and implementation of green construction and operation management.
Policies 4-7 aim to establish an evaluation system for green building tailored to the Chinese context and to set up institutions for the development of a green building market.
The grading of innovative awards and green building labelling are both based on six categories of indicators (see Technological focus for the weightings of the indicators in the grading): 1) land use efficiency and outdoor environment; 2) energy saving and use; 3) water saving and use; 4) construction material saving and use; 5) indoor environmental quality; 6) operation management.
Policy 8 is a local mandatory policy for green buildings, which required that all new social housing must be constructed in accordance with green building standards. Specifically, they must install solar water heater and apply green and renewable construction materials.
Policy 9, as the most important step for green building development in recent years, provides the overall objectives of green building for 12th and 13th Five-Year period as well as suggestions on how to accelerate green building development in China, especially, through financial incentives.
Policy 10 specifies the targets and key measures for green buildings and energy efficiency retrofitting of existing buildings for the 12th Five-Year period.

Policy 1-7: national evaluation standards and labelling
Policy 8: local policy
Policy 9-10: national policy

Relevant sectors

• Services
• Residential
• Industrial

Others
1) land use efficiency and outdoor environment (such as green space ratio, wind environment and intensity of heat island effect ); 2) water saving and use (e.g. utilization ratio of non-conventional water resources, such as collection and reuse of rain water and grey water); 3) construction material saving and use (e.g. utilization ratio of environmentally-friendly materials); 4) indoor environmental quality (e.g. shading, noise control, indoor ventilation); 5) operation management (e.g. pollution control, system commissioning).

Category	Residential Building	Public Building
Land saving and outdoor environment	0.15	0.1
Energy saving and use	0.2	0.25
Water saving and use	0.2	0.15
Construction material saving and use	0.15	0.15
Indoor environmental quality	0.2	0.20
Operation management.	0.1	0.15

Source: Technical Rules for Green Building Evaluation (interim)

Policy 1: This policy defines green building concept, responsibilities of management and executive institutions, application, evaluation and certification procedures, etc.

Policy 2 (revised in Policy 3): this policy specifies different categories of awards and key aspects for evaluation:

• ‘Green Building Innovation General Award’: indoor environment, site and environment, energy use, water use, material use, operation management; 
• ‘Intelligent Building Innovation Special Award’: functions and benefits, project quality, operation and management
• ‘Energy-Efficient Building Innovation Special award’: building envelope, windows and doors, HVAC system, renewable energy use, etc. 
• ‘Technology Award’: technical innovation, integrated benefits, and contribution to technology promotion; 
• ‘Product Award’: technical innovation, integrated benefits, and contribution to technology promotion, production conditions, services and management of an enterprise.

Policy 3: This policy includes two important documents regarding the awards for current green building development. ‘Implementation Details for National Green Building Innovation Award ’ specifies only those projects obtaining the green building evaluation label are eligible for the innovation award. In ‘Evaluation Standards for National Green Building Innovation Award’, the qualifications for the projects, evaluation methods etc. are specified. These specifications are also revisions of those included in Policy  

Policy 4: later revised by and specified in policy 5

Policy 5: This is to provide clear technical guidance for evaluation, awarding and labelling of green buildings in China. The applicants can understand how to design and construct a building that is qualified as a green building, which level their building can achieve and how to obtain labels, etc. 

Policy 6: The notice released 3 documents, which are ‘Enforcement of Green Building Evaluation Label (interim revision)’, ‘Work procedures by expert committee for green building evaluation label (interim)’, and ‘Regulations of the use of green building evaluation label (interim)’. The first document specifies that there are two types of labels. One is the Green Building Design Label (to certify whether the design plan of buildings matches the green building standards), and the other is the Green Building Label (so-called operation label) to certify that the operation efficiency was achieved for more than one year. It provides standards for green building technology options throughout the whole building life cycle, which includes planning, design, construction, operation and management.).

Policy 7: The notice generally indicates that qualified construction bureaus at different administrative levels are now given authority to certify 1-Star and 2-Star green buildings. In the attachment ‘Management Measures of 1-Star and 2-Star Green Building Evaluation Label (interim)’ of this notice, it specifies the preconditions for a construction bureau to be able to apply to MOHURD for being an evaluation agency; preconditions for local technical support organizations; preconditions for being a local expert committee; work requirements, etc.. This policy has contributed to a wider implementation of green buildings in China. Up to 2011, 26 provinces and cities had been authorized to evaluate 1-Star and 2-Star buildings within their administrative boundaries.

Policy 8: This local policy targets the construction-related departments of the Shenzhen government and private stakeholders , e.g. building designers, construction companies, property management, etc. It specifies that newly-built social housing should conform to the green building standard. Solar water heaters and renewable construction materials should be applied, in particular.

Policy 9: This policy specifies the national targets for green building development until 2020: over 30% of new buildings shall be green buildings by 2020. New green building areas shall reach 1 billion m² during the 12th Five-Year period. Major measures to achieve these targets include: (1) improving the green building standard and evaluation system; (2) establishing the green building subsidy system; (3) promoting the development of green eco-districts and large scale green buildings; (4) promoting green buildings in the field of social houses; (5) strengthening R&D in green building technologies

Policy 10: This policy highlights the following ten key fields in green building development and proposed measures in these fields: (1) Energy efficiency in new buildings; 2) Energy efficiency retrofitting in existing buildings; (3) Urban heating system retrofitting; (4) Large-scale application of renewable energy in buildings; (5) Improving energy-efficient management on public buildings; (6) Accelerating the R&D for green building technologies; (7) Promoting green material use; (8) Promoting the pre-fabricated building industry; (9) Strict control of building demolition management procedure; (10) Promoting the 3Rs “reduce, reuse and recycle” for construction waste management.

Relevant target groups

• Property development company
• Investor
• Investor-occupier

Direct beneficiaries

• Property development company

  Property development companies benefit from both the direct subsidies provided by the government

• Investor

  Investors benefit from the direct subsidies provided by the government.

• Investor-occupier

  Investor-occupiers benefit from both the direct subsidies provided by the government and the increasing comfort of the building.

• Tenant

  Tenants benefit from the increasing comfort of the building.

• User

  Users benefit from the increasing comfort of the building.

Indirect beneficiaries

• Installation contractor

• Manufacturer

• System supplier

• Engineering consultant

Relevant barriers

• Technical barriers: Investors faces the barrier of Performance uncertainties
• Knowledge and information barriers: The certification of the green characteristics in the design and construction will greatly reduce uncertainties among investors on whether the buildings will perform in a ‘green’ way. In addition, the policy set provides not only the quantitative and qualitative standards for green building, but also an explanation of each article ( e.g. why it’s required, how to do and how to evaluate, etc.) so that the actors can judge which technical measure is more reasonable for them. Furthermore, the policy set provides information on the green building technical options, evaluation tips, responsibility of each relevant department to the public. Different actors (developer, design company, owner etc.) are able to obtain relevant information in different categories (energy, water, indoor environment etc.). Thus, it addresses the barrier of asymmetric information and opportunism.
• Lack of interest and motivation in energy efficiency-improvement: It addresses the barrier that investors often focus on core activities In the future, national green building standards may be applied in some districts compulsorily. To provide incentives for green building development, the innovation award is the first award aiming at green building in China; and fiscal policy was formulated in 2012 to provide direct subsidies for those labelled as green building after one-year of operation.

Relevant incentives

• Unique selling proposition for suppliers:
• Improved reputation:
• Contribution to protection of the environment:
• Increased (re-sale) value of the property:

This policy set interacts with many other standards, codes and policies, because a green building takes an integrated approach. Below are some examples of the interaction:

• land saving and outdoor environment: Code of urban residential areas planning & design, standard of environmental noise of urban area; 
• energy efficiency: Standard of energy efficiency design for public buildings, Technical guideline of ground-source heat pump system, Standard of architectural lighting design, Graduation and test method for air tightness performance of windows, Civil building energy efficiency evaluation label; 
• water use efficiency: Standard of urban residential water use, Code for design of a building harvested water system.
• material use and saving: Limits for harmful substances in interior decoration; Limit of radionuclides in building materials; 
• Indoor environment: Standard of sound insulation design for civil buildings, Standard for daylight design of buildings;
• Operation and Management: Technical classification for intelligent community systems

1. It is the first set of national standards for green buildings;
2. It takes an integrated approach that addresses land use, energy use, water use, materials use, indoor environment, and operation management.. 
3. Using different-levels of label to classify good practice;
4. It includes two types of labels that certify green design after the construction drawing is completed and certifies green buildings after its operation. The former encourages the ‘green design’ in the construction industry.
5. Local governments are authorized for certification and management;
6. The green building program starts with voluntary participation and will become mandatory gradually.
7. Direct financial subsidies

The green building standard will be amended during the 12th Five Year Period by MOHURD, based on the implementation experience in the past 4 years (implemented since 2008).

1. To revise the classification of the three items in the Policy 4, e.g., to change some optional items 1) to compulsory items with more stringent requirements (and possibly higher energy efficiency), or; 2) to advanced items if it was proven to be difficult to achieve under the current situation. 
2. To increase some content in special areas which were missed in the current version, such as transportation management in the communities (e.g. bike lane, pedestrian lane, underground parking), barrier-free design, etc.
3. To revise the evaluation method: a new scoring system should possibly be established in accordance with the internal discussion by the standard revision team held by MOHURD in 2011. One possible way is to assign different weightings to different articles within each indicator category instead of applying the same weight to all. 
4. To acknowledge the differences among various regions: MOHURD gives permission to the local governments to formulate their own standards which are tailored to their climate, culture, geographic locations, and economic development, etc. These are based on the guiding principles of the national standard. After the national standards for green building were issued, many provinces and cities, such as Beijing, Tianjin, Shanghai, Chongqing, Hebei, Shandong, Hunan, etc, have developed their own technical standards and label management measures.
5. Developing more incentive mechanisms: Policy 9 can be optimised further by giving more specific indication of to whom the subsidy goes and how to distribute the subsidy at the local levels, etc. 
6. Completing the technical standard: The range that the technical standards covers can be extended to more building types, given the increasing number of complex buildings. This work has started since 2010, when the ‘Green industrial building evaluation guideline’ was issued by MOHURD. The ‘assessment standard for healthcare green buildings’ was issued in September 2011. The standards for other building types like the ‘green office buildings evaluation standard’ are still under development.

The policy package could also be optimised.
To complete the package with the green building design standard and improve the evaluation standard by including more building types;
To strengthen the capacity: to foster more evaluation organizations and provide independent services such as building product testing, regional planning, etc. Training accredited professionals for green building design, construction, evaluation, and so on;
To set up clearer rules for the fiscal incentive system for highly qualified projects.

The following pre-conditions are necessary to implement this type of policy
The development of an evaluation method for the six categories of indicators is a structural pre-condition for implementing the policy.
The policy set, therefore, includes the evaluation standard for green buildings. These enable the assessment whether a building can be classified as a ‘green’ building and are thus a necessary precondition for both the green building awards and the labelling scheme.
Buildings applying for the national green building evaluation must first fulfil national mandatory standards for building energy efficiency (cf. the bigEE China file on Regulations for Energy efficiency of building design and operation in new and refurbished buildings) and some architectural products design standards. Building construction drawings must be examined by the local construction bureau before applying for the green building evaluation label.

Agencies or other actors responsible for implementation
MOHURD and local construction bureaus are the administration institutions to ensure each applicant’s compliance with standards. They are in charge of the expert organizations to evaluate if the building is designed and built in accordance with the standard. The two designated management offices at national level are the Green Building Label Management Office under Science &Technology Center of Construction of MOHURD and Green Building Research Center under CSUS.

Funding
Prior to 2012, some provinces and cities had already established special funding to encourage green building construction. For example:

The procedure of policy design:

1. drafted by major building institutes, universities, and department of MOHURD which is responsible for the standard formulation;
2. evaluated by expert team designated by MOHURD;
3. revision based on evaluation results and proposals;
4. MOHURD release the version for public feedback;
5. Formulating the final version and releasing for implementation.

The procedure of obtaining national green building evaluation labels:

1. Submit application to either one of the two national label management offices;
2. Pay the registration fee;
3. Download, fill in and submit the application materials;
4. Project is examined for its construction permit;
5. If ‘OK’ to step 4 above, pay the evaluation fee;
6. Green Building Design Label certification: construction drawing is evaluated by an expert group organized by management offices; Green Building Label: the expert group will conduct the on-site investigation and evaluation;
7. Evaluation results are notified on the official website;
8. If notified, the certificate and label are given to the applicants.

Quantified target
Policy 9: This policy specifies the national targets of green building development until 2020: over 30% of new buildings shall be green buildings by 2020. New green building areas shall reach 1 billion m² during the 12th Five-Year period.Policy 10: By the end of 2015, 20% of urban new buildings are to fulfil the green building standard. The objective of existing building energy efficiency retrofitting during 12th Five-Year period is to accomplish heating metering and energy efficiency retrofit forexisting retrofit buildings in the North Heating area up to more than 400 million m²; to accomplish existing residential building energy efficiency retrofitting for 50 million m² in the Hot Summer Cold Winter climate zone; to conduct energy efficiency retrofitting for commercial buildings and public sector buildings up to 120 million m²; to implement an energy efficiency retrofitting demonstration for 400, 000 rural dilapidated housing units. The particular technical targets in national green building standard include, for example:

1. Energy saving: In the energy section, an additional energy saving of 20% compared with the current compulsory building energy efficiency standards is one of the advanced items;
2. Renewable energy use: over 5% of renewable energy use in total energy consumption is an optional item. 10% is an advanced item. 
3. Water saving: A 10% non-traditional water use in total water consumption is an optional item. 30% is an advanced item.
4. Material saving: over a 10% recycled material use in total building material is an optional item. Over 5% reusable material use is an advanced item. 

Actors responsible for design
Ministry of Housing and Urban-Rural Development of the People's Republic of China (MOHURD)
Ministry of Finance of the People's Republic of China (MOF)

Actors responsible for implementation
MOHURD, as well as provincial and municipal construction bureaus and financial bureaus, are responsible for managing the Green Building Label system with its financial subsidy system.
Enterprises in the construction industry, such as property development companies, construction companies, building design units, etc. implement the standard.

Monitoring
The innovation award and green building standard both belong to ‘voluntary labelling schemes’, thus there is no mandatory impact and compliance monitoring system. The national management office has published a book called the ‘Green Building Annual Report’ to conclude China’s green building development and to assess the standard implementation every year since 2008.

Evaluation
Some research paper involves this content, which will be mentioned below.

• Dynamic market transformation and/or innovation: (1) The Evaluation Standard for Green Building has established an evaluation system for green building tailored to the current conditions in China. In the energy section of the Standard, one advanced item requires an additional 20% of energy saving in comparison to the current compulsory building energy efficiency standards; (2) This innovative award rewards those good practice buildings, which also improves reputation of the property development companies and architects. (3) Although the green building innovation award and the evaluation standard only encourage voluntary participation, their main purpose is to establish exemplary projects and expand the influences of green buildings in market. (4) Meanwhile, the green building standards have standardized some advanced building technologies application in aspects of Water, Land, Energy and Material Efficiency. The green building label (so-called operation label) can only be applied for after one-year of building operation, which also promotes energy-efficient user behaviour and building operation and management. The green building policy set aims at a market transformation from building energy efficiency to green building in China. Through the technical standard, labelling and award system, it’s possible to promote the green building development gradually from building design, construction to operation, and influence the building industry transformation as well as human behaviour. The national green building standard will be continuously revised with the objective of higher resource saving and a better environment.
• Avoiding lost opportunities: The policy set promotes green building development by specifying the saving targets in aspects of energy, water, land, material and improving the outdoor and indoor environment.
• Minimising snap-back effects: The standard will be continuously revised and is open-ended, therefore no snap-back effects will occur.
• Creating Spill-over effects: Through participation of both evaluation programmes (green building label and the green building innovative award), building professionals are becoming increasingly skilled and experienced in green building design, construction, and operation. Enterprises in the construction industry can benefit from improved reputation through their experiences of constructing green buildings, so they are probably willing to continue to carry on green building practices, not just for labelling and award.

Green building itself is an integrated system, and there are land, water, materials saving and indoor environment requirements in addition to energy efficiency requirements. The promoted technologies include optimized architectural design using computer simulation, renewable energy use, rainwater collection for irrigation, waste separation and recycling, renewable construction materials uses, and so on.

The following barriers have been experienced during the implementation of the policy

1. Some evaluation items are not elaborated. Calculation methods are not clear enough;
2. The Green Building Design Label gives opportunity for those projects which have good design. However, it is also very possible that the building will not actually be built as designed afterwards, due to the lack of mechanisms to ensure the consistency between designing and construction.
3. The current standard doesn’t include new technologies which are emerging in engineering practice, because the revision is not made quickly enough. 
4. The subsidy is relatively small compared to the total cost of the green building project. Thus, the financial incentive is not sufficient for developers to build green buildings. However, developers may do it due to the enhanced reputation it provides.
5. A lack of effective monitoring systems.

The following measures have been undertaken to overcome the barriers

1. MOHURD later introduced the Technical Supplement for Evaluation Standard of Green Building (design) （建科[2008]113号）, Technical Supplement for Evaluation Standard of Green Building (operation) （建科函[2009]235号）to clarify some vagueness; 
2. MOHURD is currently organizing an amendment to the Evaluation Standard of Green Building.
3. Related standards for different building types are under development.
4. For the certified governmental projects it will become mandatory to use energy consumption monitoring systems to track their operation.

Green buildings must fulfil national energy efficiency standards to ensure that it has a high level of energy efficiency. No specific evaluation of energy savings has been conducted for green buildings but for all buildings which meet national energy efficient standards. The energy saving achieved by the green building candidates varies with different label levels. They must all have at least the 50% energy saving required by law, compared to buildings in the 1980s.
Until late December 2010, a total of 113 projects had obtained green building labels, among which 10 were the Green Building Label (operation label) and the rest were Green Building Design Label. Up to the end of November 2011, 234 projects obtained green building labels from two national management offices. 40 projects obtained labels from local construction bureaus. However, compared to the construction boom during the current urbanization period, the green building share in new buildings is still very small.
Investigation of over 70 certified project samples by one of the two national management offices – Green Building Research Center of CSUS shows that: the indicators like residential building green area ratio, outdoor permeable pavement ratio, non-traditional water use percentage, etc. have an apparent improvement according to the label level upgrade during these years; but indicators like building energy saving, recycling material use percentage hasn’t been enhanced much. The insignificant improvement in energy performance is caused by the fact that the precondition of being green buildings is the fulfilment of building energy efficiency code, which all new buildings should fulfil.

National green building innovative award

1st session（2005）：40
www.bigee.net/s/8mrinj
2rd session（2007）：13
www.bigee.net/s/s19e9j
2011：16
www.bigee.net/s/yuujkb

Until late December 2010, a total of 113 projects had obtained green building labels, among which 10 were the Green Building Label (operation label) and the rest were Green Building Design Label. Up to the end of November 2011, 234 projects obtained green building labels from two national management offices. 40 projects obtained labels from local construction bureaus.

Investigation of the incremental cost for green buildings to investors, based on 40 labelled project samples implemented during 2008 -2010 by China Academy of Building Research:
Public buildings:
1-Star green buildings: 45 RMB/m²
2-Star green buildings: 176 RMB/m²
3-Star green buildings: 320 RMB/m²
Residential buildings:
1-Star green buildings: 63 RMB/m²
2-Star green buildings: 131 RMB/m²
3-Star green buildings: 219 RMB/m²
www.bigee.net/s/1sm8fd

Investigation of the incremental cost forgreen building to investors based on 64 labelled project samples implemented during 2008 -2010 by IBR:
Public buildings:
1-Star green buildings: 49 RMB/m²
2-Star green buildings:128 RMB/m²
3-Star green buildings: 345 RMB/m²
Residential buildings:
1-Star green buildings: 53 RMB/m²
2-Star green buildings: 141 RMB/m²
3-Star green buildings: 231 RMB/m²

Investigation of the incremental cost for green building to investors based on 77 labelled project samples during 2008 -2010 by one of the two national management offices – Green Building Research Center of CSUS :
Public buildings:
1-Star green buildings: 30 RMB/m²
2-Star green buildings: 230 RMB/m²
3-Star green buildings: 370 RMB/m²
Residential buildings:
1-Star green buildings: 60 RMB/m²
2-Star green buildings: 120 RMB/m²
3-Star green buildings: 300 RMB/m²

The labelling is expected to be cost-effective for the government. The costs of policy and compliance are rather small compared to the resources saved by green building design. For the investors and the building users, we do not know if the actual incremental costs mentioned above will be paid off by the resources saved.