Low hanging fruit: Energy efficiency weaves the path towards a green, circular economy

Blog by Patrick Haverman, Deputy Resident Representative, UNDP in Viet Nam. Editing by Edwin A. Edou.

October 29, 2021


As we think about the race to zero, enabling a green transition in buildings, at home or at the office, is an important part of that conversation. After all, energy efficiency is one of the cheapest and easiest avenues to reduce emissions.

Still, Viet Nam must carefully balance economic recovery from a global pandemic, improved social outcomes, climate change adaptation, and addressing its reliance on fossil fuels among other considerations to maintain its status as one of the fastest growing economies in Asia.

For Viet Nam’s building sector, rapid urbanization and expansion is threatening to increase its share of energy consumption, accounting for some 40%.

However, contemplating how to approach solving these interlinked challenges is easier than we think. Sometimes, solutions lie in the problems themselves.

A win-win.

A great example of these “wins” is UNDP’s recent collaboration on the “Project: Energy Efficiency in Commercial and High-Residential Buildings” (EECB). Commenced in 2016, the EECB project was designed to address barriers to improved energy efficiency performance and gradually realize the untapped potential of energy savings from buildings that directly contribute to greenhouse gas mitigation.

Located in Ha Noi and Ho Chi Minh city, the project required strong partnership from government, building developers and owners, design, construction and operation technical teams, scientific and academic institutions, among other stakeholders.

And the results?

Among 23 new and retrofitted buildings, investment in 75 energy efficiency solutions have resulted in cost savings of about US$ 1.5 million and energy savings of between 25% to 67%. These results leave no room for speculation about wrongly perceived high costs of energy efficiency solutions. Energy efficient solutions can be technically and economically adapted to different types of buildings. They only require an upfront investment which pays for itself over a relatively short period of time and immediately in terms of CO2 emissions).

During the first Covid lockdown in Thailand, I joined millions around the world in the work-from-home shift. In routine Zoom meetings in the house, my wife and I for work, and our 9 and 11-year old kids for school, there was a noticeable rise in our electricity bills. From this successful project, I saw how retrofitting with pragmatic solutions such as installing double-glazed glass windows, LED lighting, a PV system, and replacing our gas boiler with a heat pump would have significantly lowered those bills and my emissions.

How can we become more ambitious?

Three recommendations for advancing energy efficiency in commercial and residential buildings

1)      The establishment of a set of tools containing specific energy consumption profiles, benchmarking, and an energy efficient building certification scheme represents a major step towards implementation of the revised Law on Construction and energy efficiency building code. Since the operation phase accounts for 70% - 80% of total emissions over a building’s lifetime, it is essential that these tools are formally introduced and updated on a yearly basis for continuously monitoring and improving a building’s energy performance. This will further help raise the public awareness, and steadily increase demand for more energy efficient and green working and living places.

2)      Greater incentive schemes and innovative financing have been proven to be conducive to the broad development of energy efficient buildings globally. Further inter-ministerial discussion will be needed to upgrade existing, but hardly accessible schemes, or to define new ones for the building sector. The creation of an enabling environment for green financing such as green loans or green bonds is equally necessary for financial access by the private sector to spur investment in energy efficient and green buildings.

3)      The private sector should be encouraged to set the expected energy performance of their buildings as a key feature. Such a move is strongly encouraged as Net Zero Energy or even Net Zero Carbon buildings must become the industry standard by 2050. Public awareness of the co-benefits in the form of health, environment, and reduced electricity bills should also be raised to generate increased demand for energy efficient and green buildings.

The efforts made over the last five years were clearly significant. Altogether, the project oversaw a direct greenhouse emission reduction of more than 73,000 tCO2, nearly double the target set at the project design.

As a credible start, the win beckons us to do much more.

In recent remarks to the High-level Dialogue on Energy, UN General Secretary António Guterres urged the global community to “triple investment in renewable energy and energy efficiency”. Moreover, Guterres also called for no new coal plant construction after 2021.

President Nguyen Xuan Phuc at this year’s General Assembly brought attention to the climate crisis, stressing “as we head to the COP26 Summit, we need to make every effort to cut greenhouse gas emissions”. The President underscored the need to foster transition towards a green and circular economy, emphasizing financing and capacity building assistance “to ensure harmony between man and green nature”.

In agreement, 17 ambassadors, the World Bank Country Director, and the United Nations Resident Coordinator, shared a declaration stating: “we are committed to provide both financial and technical support to the Government of Viet Nam to motivate public and private investments in the energy transition and adaption, and to mobilize green finance and international climate finance”.

Energy efficiency is one strategic variable that is an enabler for inclusive and sustainable development.  UNDP is steadfastly committed to its partnership with the Government of Viet Nam, building sector and other stakeholders to enable such important and positive changes.