Energy Efficiency: Getting more JUCCCE per unit of GDP
Peggy Liu, founder and Chairperson of Joint US-China Cooperation on Clean Energy (JUCCCE) , an innovative bilateral public-private partnership based in Shanghai, speaks to The Green Leap Forward.
Energy cooperation was one of the key issues that underpinned the fourth 
US-China Strategic Economic Dialogue held last week. Vice-Premier Wang Qishan, the head of the Chinese delegation released a statement calling for increased cooperation between the two sides on several fronts, including R&D, coordinated energy policies and increased bilateral dialogue. The energy discussions culminated in a commitment to negotiate a ten year energy and environment agreement.
Encouragingly, however, a handful of individuals and organizations have not waited for any ink to be spilled in the diplomatic arena before jumping into action. One such individual is Peggy Liu and her organization called Joint-US Cooperation on Clean Energy (JUCCCE).
The Juice on JUCCCE
JUCCCE was founded in April 2007 by Peggy Liu, a former McKinsey management consultant and COO of Mustang Ventures, a Shanghai-based venture capital firm. The organization was launched out of the MIT Forum on the Future of Energy in China held last year in Shanghai, where JUCCCE is also now based.
JUCCCE is a non-profit incubator of cleantech and energy efficiency capacity building institution initiatives seeking to serve, as Liu describes it in the video below, “a single bilingual and bicultural organization that will act as a hub of information exchange and cooperation” on clean energy in China. Based on the observation that China’s rapid development has it compressing 30 years of industrialization in the space of ten, JUCCCE has set itself a ten year mandate to create a legacy of self-sustaining, local capabilities. Tapping into Liu’s vast network of top minds whom she has become acquainted with as a result of her stints at consulting and venture work, JUCCCE conducted a comprehensive study of the Chinese energy industry and identified a dozen key projects designed to create the greatest impact in the shortest amount of time. What I love is the Chinese name for the organization, which is 聚思 (jǘ sì), which is not only a phonetic translation of the acronym, but by itself literally, and appropriately, translates in English to “collective thought” or “coalition of thinkers.”
Underpinning JUCCCE’s philosophy are three fundamental observations (the need to accelerate information flow, need for integrated urban planning and need to strengthen supply chains) which Liu describes in the following video:
Based on these observations, JUCCCE has formulated a three-pronged approach of education (skills building and leadership development at every level through effective channels), collaboration (with international and local institutions, taking advantage of web-based communications) and deployment (of customized green strategies for specific industrial sectors).
On education, Liu elaborated in an exclusive interview with The Green Leap Forward:
China doesn’t have an energy policy problem [GLF note: see, e.g. the various progressive policies that this blog has highlighted in its maiden post], rather, it has an energy workforce problem. We can have all the solar panels we need free of charge and that will not be enough if we don’t have the necessary skilled people to install these systems and maintain them. So, we believe that people matter…Education and skills building are very important.
Liu continued to explain that the ability to implement these progressive energy and environmental policies or programs is most effectively achieved through the strategic targeting of “channels of decision makers” rather than individual decision makers. Because Liu wants to teach the Chinese how to fish rather than catch the fish for them, JUCCCE’s programs are designed to be replicable and scalable. Let’s take a look at two of JUCCCE’s programs that Liu described for The Green Leap Forward, and that targets the decision-making channels of mayors and schools, respectively.
Mayoral Training on Energy Efficiency
One program is the Mayoral Training for City-level Energy Efficiency Programs, which was announced as a one of the commitments under the Clinton Global Initiative in 2007. As the name of the program implies, JUCCE is planning workshops to equip mayors of cities nationwide with energy efficiency solutions to deploy in their home jurisdictions. JUCCCE will partner with international experts and energy efficiency solution providers (many of which are multinational corporations) in order to build a web-based database of best practices and products, sector-by-sector, that can be presented to, and easily deployed by, the workshop participants.
The importance of focusing on cities is obvious. I have previously highlighted a McKinsey report on China’s rapid urbanization to facilitate the largest scale of rural-to-urban migration in history—approximately 350 million by 2025. “In China, city mayors are the kings of their fiefdoms, so it is really important to target them,” explains Liu, referring to the broad authority of city mayors in determining economic and development policy. This acceleration of information flow of best practices/products targeting mayors as key channels of decision making becomes even more effective when coupled with the State Council’s new policy to include environmental and energy efficiency criteria in the promotion evaluation of local and provincial bureaucrats, as well as the national goal of increasing energy consumption per unit of GDP by 20% by 2010 (see here).
Shanghai Lighting Program
Another noteworthy JUCCCE program involves the replacement of 10 million conventional incandescent light bulbs with energy efficient compact fluorescent light (CFL) bulbs in Shanghai. The brilliance of this lighting program is two-fold. First, it targets youth by directly enlisting the help of Shanghai school children for distribution. Each student will receive up to 18 CFL bulbs and will be asked to bring back an incandescent bulb for every CFL bulb they replace it with. Liu conservatively estimates that the program will reduce approximately 2.2 million tons of carbon dioxide emissions over the lifespan of the CFL bulbs. This is environmental education at its best— empowering the young to recognize that little actions can make a difference by coordinating and aggregating individually small efforts into part of a large-scale city wide program with substantive results.
Second, the method of financing the program is highly innovative. The purchase of the CFL bulbs will be made by proceeds from advertising on the packaging 
of the CFL bulbs and by the clean development mechanism (CDM) under the Kyoto Protocol. JUCCCE and its partners are exploring the possibility of structuring the project as a programmatic CDM, which I have previously described in the context of Xiamen’s ecocity efforts. Although Liu recognizes the legal and technical complexities involved in structuring such a CDM project, she is hopeful that such a program would be approved by the CDM authorities as it would represent of the first energy efficiency lighting programs to ever use the CDM.
Liu expects the program to launch in the next six to seven months, but JUCCCE has in the meantime partnered with Citi and GE to hold a pilot program distributing 10,000 CFL bulbs last November (pictured). The hope is that the success of this larger CFL lighting program can be adopted and replicated in cities across the country.
Why JUCCCE Matters
What makes organizations like JUCCCE so important in tackling the energy and climate challenges of our day is that it effectively bridges the gaps between the public and private realm. In the vocabulary of an economist, it helps correct market failures such as free rider problems and information asymmetry and creates incentives or platforms for businesses and policy makers to undertake clean energy initiatives that they would not normally undertake. This is demonstrated well in the two projects described above. In the case of the mayoral training program, information asymmetry is overcomed by the creation of a web-based database. In the case of the Shanghai lighting program, financial barriers are overcome through the use of innovative financing techniques.
China, and the rest of the world, needs institutions like JUCCCE to “fill in the gaps” because of the limitations to motivations/incentives inherent in political and commercial institutions to take action. The Green Leap Forward looks forward to profiling more innovative organizations like JUCCCE that are breaking silos to redefining how all stakeholders can think about tackling our energy and climate crisis.
July 5th, 2008 at 10:06 pm
[T]he city governments of Tianjin, Beijing, and Shanghai have already announced their programs… where is JUCCCE after 18 months of talking this program up?
If they do get their plan kick started, it will actually put a lot of good incandescents into the trash, and given their lack of oversight on the project …. it could potentially create a black market for the bulbs.
So.. perhaps, it is better to look at Natural Resource Defense Council… they are actually executing and their programs will have a far deeper impact
July 10th, 2008 at 11:15 am
Thanks for your comments, “CSRisPR”. I am not a spokesperson of JUCCCE, but let me share with you some things that I have learnt in my communications with JUCCCE that may address your concerns.
Yes, city governments are running their own efficient lighting programs. It is important to note, however, that these programs are of a finite scale and rely heavily on government subsidies. Not only are the city programs not mutually exclusive to JUCCCE’s program, but JUCCCE’s program involves innovative financing mechanisms described in the above post that render tax payers’ money unnecessary. The ultimate goal of this program is to set a precedent for scalability, i.e. to create a feasible lighting program that is replicable in other cities across China, including those that may not have government-subsidized lighting programs.
Any risk of an emerging “blackmarket” for replaced incandescents will be minimized. Contrary to your claims, JUCCCE, I am told, will in fact administer the bulb exchange process and have developed with its partner(s) procedures for the accounting for, collection and environmentally-safe disposal of, the replaced incandescent bulbs.
Furthermore, and for me personally the absolutely coolest aspect of it all, the JUCCCE strategy of targeting school children as the agent for this change provides positive externalities of environmental educations (hands on at that!) that is sorely needed in contemporary society, especially Asia.
The CDM process is a very complicated and entails a lengthy back and forth approval process that is outside the hands of the applicant. Moreover, the CDM has rarely been used for mass lighting projects of this nature, entailing extra technical challenges in the CDM application process. From my conversations with JUCCCE, I know that they have absolutely top-notch experts working with them on this project, such as the former head of GE Asia-Pac Lamps group, and one of the foremost experts in CDM, Anne Arquit Niederberger.
To be fair, JUCCCE has not been around for 18 months as you claim; it was created in April ‘07 and really didn’t kick off officially kick off operations till July ‘07, so I’m willing to be a little more patient about seeing results and then letting those results speak for themselves. The website for JUCCCE ( http://www.juccce.com) has just been updated, providing much more details about their programs then was previously available at the time the above post was written, and providing an avenue for any constructive feedback and comments directly to the organization.
July 16th, 2008 at 10:49 am
[...] you haven’t heard of JUCCCE before, check out this post at The Green Leap Forward. If you can’t read the invitation reproduced below, you can get a [...]
August 5th, 2008 at 1:37 am
Julian,
All fair points, but the CFL programs that are at the city level are not all that small (see Campaign gets China to switch on to energy efficiency
As for JUCCCE’s propensity to advertise their programs at a level that they have yet to achieve, and the devil is in the details.
for CFL program - Who is going to manage this program? How are the managing the waste of incandescents that may actually still be good? Have they set up a recycling model of any kind? and How are they ensuring that these do not end up in a market?
for the mayoral program - who is doing the training? How will this training differ from that of other training programs that these mayors have been getting in/out of China? Who is producing the training materials?
I realize that you are not the spokesperson, but the problem with this program is that it is all spokespeople at this point, and in 12 months of seeing the same pitch 4-5 times, these are questions. that are still unanswered when asked of the people of JUCCCE.