Análisis Ley de Responsabilidad Extendida del Productor

Compared with the housing construction sector, a linear value chain cannot be identified as clearly with regard to retrofitting. This is due to the fact that unlike in the housing construction sector, so far, there are no established and universally applied procedures for retrofitting. This implies that different tasks can potentially be fulfilled by a variety of actors. In addition, in the case of retrofitting the value chain and its unclear organization induces challenges which will be discussed as follows. Numerous insights which we gained in this context are based on the research we conducted on retrofitting projects such as the GTZ pilot project in the city of Tangshan.

1) Initial action and the role of local governments

The first step with respect to retrofitting is to initiate the complex and protracted process. The key question in this context is: Who takes the initiative? Various stakeholders can potentially trigger the process by trying to raise the topic with a municipality and put it on its agenda. In Beijing, there have been cases of resident groups which were formed and then put pressure on the local government as well as heat providers to raise their room temperatures and thereby, for example, improve the overall room climate. However, since this takes quite a high degree of auto- organization, in most cases local governments are the driving force behind retrofitting and not the residents.

GTZ’s Tangshan project shows that, apart from initiating the retrofitting process and financing a big share of it, there are also other reasons why the local government plays a leading role. As retrofitting in Tangshan involved a plurality of governmental departments such as the construction department, planning department, municipal management department, housing management department and power supply department, the local government had an important role as coordinator (Sino-German Technical Cooperation “Chinese Energy Efficiency in Existing Buildings” Project 2007).

2) Discomfort for residents

Retrofitting is a time-consuming undertaking which brings a great amount of discomfort for residents. During the construction phase, the residents’ every-day lives can be disrupted by noise, dirt and the presence of workers.

Therefore, it has proved to be easiest to conduct retrofitting in lower- income apartments where there is no risk of damaging valuable furniture or interior decoration and residents are less reluctant to allow work to take place. One option (that was also adopted in the GTZ project in Tangshan) which makes residents more ready to accept work being carried out in their private living area is to adopt an integrated approach, i.e. to combine energetic retrofitting with a general renovation of the apartment, carrying out different tasks in one go.

3) Collective action and the decision-making procedure

China has one of the highest home ownership rates in the world, largely as a result of the privatization of public sector housing (Duda / Zhang / Dong 2005, 8). About 50-60 percent of Chinese urban families own their apartments (World Bank 2001, 10). As most apartments are individually owned, residents themselves can only renovate the portions belonging to them, so the external wall insulation, roof heat insulation and heating system renovation need to be collectively organized. This implies that all of the inhabitants of a house need to agree on the carrying out of the retrofitting work and must be willing to make the necessary contribution. Transaction costs are generally high due to the great number of people involved and a lot of advocacy work on the part of the local government and, for example, the international development cooperation agencies is necessary in order to educate residents about the benefits of retrofitting. To be able to count on the cooperation of resident committees is essential in this context.

In order to better illustrate the benefits to residents, successful examples of retrofitting projects have a convincing effect. In Beijing, for example, residents agreed that their house should be retrofitted after they had visited the GTZ project in the nearby city of Tangshan. Research by MOHURD found that 68 percent of Beijing residents said that they would pay more for enhancing EEB after visiting the site of the project in Tangshan.

Before visiting, just 30 percent had said that they would pay extra (China Daily 2008).

4) Costs and cost-sharing

Retrofitting old buildings is expensive when compared to enhancing energy efficiency in new buildings. In Tangshan, the total costs (including extra or additional costs) were shared by the stakeholders as follows: government: 53 percent, Sino-German EEEB Project (international cooperation): 25 percent, heat supplier: 11 percent, residents: 6 percent and social donations: 5 percent (Sino-German Technical Cooperation “Chinese Energy Efficiency in Existing Buildings” Project 2007, 97). In the case of Tangshan, no ESCO took on a part of the costs, nor were private investors of the voluntary carbon market involved.

Given that the Tangshan project is a demonstration project, this allocation formula for burden sharing can hardly be generally applied. Therefore, it remains an open question as to how the costs of retrofitting should be distributed among the different stakeholders, i.e. residents, heat-providers, the government at the local as well as central level and the state-run companies which used to own the apartments. To date, there are no legally binding regulations which prescribe how costs are to be shared.

In most cases, the inhabitants of apartments in need of retrofitting are unable to pay for the entire retrofitting costs. Additionally, most residents will not agree to carry the whole burden of improving the apartments which were originally constructed by the government. For them, it is obvious that, as the constructor and former owner, the state has a major responsibility to make a financial contribution.

For the MOHURD and local governments, it is a huge challenge to find out what an ideal sharing of the financial burden could look like. On the one hand, residents are supposed to contribute, but on the other hand they will not agree to an arrangement which they perceive to be unjust. Consequently, in each municipality, an individual and specific balance of interests has to be found by means of institutionalizing a participative communication process which involves all stakeholders (Sino-German Technical Cooperation “Chinese Energy Efficiency in Existing Buildings” Project 2007, 148).