Honeywell Chairman and CEO Dave Cote Talks Urbanization in China
November 14, 2014
What do Alibaba and cement have in common? They’re both notable indicators of China’s tremendous growth and participation in the global economy. From the e-commerce giant that’s now worth more than Facebook, to the building material that China produces at a rate 30 percent higher than the United States (totaling 60 percent of the world’s overall production and consumption), China is on a tremendous economic growth trajectory, and the engine behind it has been an urbanization boom that’s transforming the country.
This unprecedented migration to China’s city centers is expected to bring more than 300 million Chinese citizens into densely populated areas by 2030. This means increased stress on current infrastructure and resources — from buildings and transportation systems, to the water infrastructure and electrical grids that help keep the country running.
Earlier this year, China presented its 2014–2020 urbanization plan. While the plan forecasts a slower urbanization rate compared to the last decade, government leaders are now more focused on improving quality of life in these urban centers for China’s citizens. Much of this quality improvement will focus on mitigating infrastructure issues as urbanization continues, as well as taking steps to increase energy efficiency and lessen the environmental impact of this rapid growth.
On November 10, Honeywell Chairman and CEO Dave Cote participated in a discussion addressing these very issues as part of the Paulson Institute’s first annual meeting for the CEO Council for Sustainable Urbanization in Bejing. The CEO-led council — formed by the Paulson Institute in partnership with the China Center for International Economic Exchanges (CCIEE) — includes CEOs from U.S. and China-based companies. The council’s primary mission is to advance sustainable urbanization by leveraging business insights and corporate and environmental practices, with a focus on five key areas including buildings, energy, water, transportation and supply chain.
Cote spoke about Honeywell’s sustainability experience in China, which included an automated demand response technology pilot project in the city of Tianjin. This project found that ADR reduced their heating, cooling, lighting and computing loads effectively and in line with the forecasted reductions of approximately 15 percent for industrial facilities and 20 percent for commercial facilities. The lessons learned from that work that can be applied to future council efforts. It’s this very experience that will help set the tone for the council’s work in the next year.
Going forward, the council will form an action plan for its first year that includes two collaborative, scalable projects aimed at upgrading building standards in China, and increasing renewable integration and grid-level energy efficiency. By focusing on these two key areas, the council will lay the foundation to help transform China’s key urban areas into smarter cities boasting some of the world’s most innovative technologies and processes.
[caption id="attachment_10632" align="alignright" width="281"] City of Tianjin[/caption]
Of course, Honeywell is no stranger to making cities smarter and more energy efficient, and can point to projects around the world that demonstrate this expertise. In addition to Tianjin, Honeywell and the U.S. Trade and Development Agency recently announced infrastructure improvement efforts in Vietnam, including an automated demand response pilot project in Ho Chi Minh City that will demonstrate ways to stabilize the grid and improve power reliability and affordability. And this builds on previous efforts in other parts of the world that have proven what is most effective in managing how energy flows across the grid, including Honeywell’s work with Scottish and Southern Energy in the U.K.
The future for China is exciting and full of promise as it works with the U.S. through collaborations like the CEO Council for Sustainable Urbanization. And with its global experience and expertise, Honeywell is well-positioned to contribute to these efforts in a very meaningful and impactful way.