Actions by government and civil society to reduce air and water pollution have been unable to keep pace with industrial expansion and rapid urban development. Failure to protect the environment will prevent China achieving Xiao Kang. UNDP is therefore assisting China to address its environmental challenges by establishing partnerships among the stakeholders: government, the public, industry and commerce. In close co-operation with the government of China, UNDP are assisting 23 cities to strengthen their environmental governance through various projects, with spin off benefits to many more cities. Key projects include Capacity Building for the Establishment of Urban Water Quality Regulatory Systems and Promotion of Clean Energy for Urban Pollution Control. The latter project, Clean Energy Action (CEA) has particular relevance to the urban construction theme of this conference.

2. CLEAN ENERGY ACTION

Many cities are failing to balance local economic development needs with environmental protection due to lack of adequate governance structures and capacity. Currently, coal dominates China’s energy supply market and this heavy reliance on coal is expected to continue for the foreseeable future. As a consequence, air quality is poor in many cities and health problems are rife among the population.

Assisted by UNDP, the Ministry of Science and Technology (MOST) and the State Environmental Protection Administration (SEPA) are helping 18 pilot cities, in different parts of China, to improve air quality by tackling the problem at source. This involves gathering and analysing energy supply, energy balance, energy use, environmental and technological data to establish a basis for clean energy planning. Public awareness campaigns are conducted to highlight the important role consumers can play by using energy more efficiently.

In some cities, switching from low cost coal to cleaner but more expensive gas and electricity is being forced very successfully by administrative order. While environmentally beneficial changes can be imposed by this method, UNDP are promoting the introduction of market-based instruments (MBIs) to create incentives for energy producers to reduce polluting emissions and for energy end users to choose cleaner energy sources and to use energy more wisely. However, the applicability of MBIs depends on the existence of market players able to make their own choices and such conditions have yet to be achieved widely. Nevertheless, some cities have made good use of the idea of MBIs by combining them with administrative regulations.

A review of progress after three years of clean energy action has demonstrated measurable improvements in air quality of many of the pilot cities, despite continuing expansion and rising energy demands. These achievements can be attributed to the commitment shown by the pilot city clean energy project offices and the strong support and drive from the national project management office (PMO).

Key ingredients in ensuring success have been:
· Comprehensive training organised by MOST and UNDP in the relevant subject areas including clean energy policy and planning, MBIs, data capture and analysis, and clean energy technologies. This included international case studies of successful clean energy planning and implementation
· Development of clean energy institutional and policy framework within pilot city governments and clearly defined clean energy planning responsibilities and targets
· Commitment to succeed driven by city pride together with strong direction and motivation from MOST and the national PMO
· Exchange of ideas and experiences between experts in different pilot cities
· Coaching of the pilot city teams by national domestic experts
· Increased awareness on clean energy actions and technologies developed through the creation of web sites, training courses and dissemination programmes within pilot cities
· International study tours which demonstrated what can be achieved in terms of a clean city environment.

Typical problems faced in implementing clean energy plans are:
· Environmentally preferred options often have higher capital costs than coal-based sources
· Complex administrative systems that are unresponsive to change
· Incomplete power sector reform and infrastructure development
· Lack of financial resources and hence too much reliance on government funding.

3. TOWARDS A SUSTAINABLE CLEAN URBAN ENVIRONMENT

Analysis of the pilot cities’ progress reports has enabled the critical elements of successful, and potentially sustainable, urban environmental governance to be identified. The most successful cities have established:

· A strong institutional framework with a team whose responsibilities are clearly defined, consisting of members from different departments representing a range of expertise and experience encompassing environment, energy, industry, city development planning, construction and financing. Decision-makers are involved through the medium of a steering committee, and technology support through an expert group.

· A policy and legal framework in which CEA is integrated into the overall city policy programmes and not merely treated as an “add-on” to the city’s activities.

· Affordable plans – although too often reliant on government funding. While central and local funds may be needed to kick-start changes, in the longer term the whole fiscal system has to reflect CEA as an integral part of city development.

· Stakeholder involvement through awareness campaigns motivating commercial, industrial and public consumers to take beneficial actions.

· Positive social benefits in terms of new jobs associated with the clean energy technologies

· Appropriate energy technologies selected after analysis and projection of energy demand and end use.

The pilot cities are committed to continuing clean energy action beyond the term of the current project but they will still require technical and expert support. At the same time it is essential that their experiences are passed to other cities with the ultimate aim of including all of China. In order to ensure sustainability and wider application, the process of CEA now needs to be strengthened by:

· Institutionalisation of clean energy planning within NDRC, MOST and SEPA departments at national and lower levels of government
· Central government policy which requires city governments to undertake and audit CEP activities
· The establishment of CEP organisational structures within city governments with clearly defined responsibility and accountability
· Enhancing compliance monitoring for clean energy policies and actions
· Creating markets into which MBIs can be introduced to steer beneficial change with decreasing governmental intervention

Developers, architects and engineers all have important roles in the CEA process. While development projects must ultimately be financially successful, responsibility for environmental protection must also be accepted. As increasingly sophisticated MBIs are introduced, the most successful companies will be those that recognise the trends and adapt accordingly. Developers will also have to satisfy the environmentally focussed needs of consumers to maintain their sales and prices.

Practical measures include more efficient energy use during construction and the operational life of buildings through the introduction of best practice methods, high insulation and energy efficiency standards and codes.

4. CONCLUSIONS

A number of pilot cities in China have demonstrated that real improvements in air quality can be achieved in the urban environment through systematic clean energy planning and implementation. The public is becoming increasingly sensitive to the needs of environmental protection and is likely to become more discerning with its choices and developers should recognise this.

The integration of clean energy planning into the existing institutional framework will require the commitment of government, and implementation of more widespread clean energy activities will be constrained until market situations are allowed to develop which will encourage private sector participation.

ACKNOWLEDGEMENTS
The strong support and assistance of Mr Li Baoshan, National Project Director (MOST) and Mr Xu Yunsong, National Co-ordinator, Ms Maria Suokko and Mr Miao Hongjun (UNDP), the domestic experts led by Prof Zhang Zhengmin and my European colleagues Dr Gerhard Weihs, Dr Miroslav Maly, Ms Marina Vathi and Dr Steve Ivatt are gratefully acknowledged together with Ms Wang Weili and her team at CICETE.