CHANGSHA, China – Zhang Yue has grounded his three private jets and personal helicopter. He has stored the midnight blue Rolls-Royce stretch limousine and canary-yellow Ferrari behind the conference centre he built here as a reproduction of a French palace. This past summer, he kept the thermostat in his office at a steamy 27 degrees Celsius.
Zhang has embraced frugalities like working in heat rather than turning on an air conditioner not because of any financial setback. He still shows up on lists of China’s wealthiest entrepreneurs, with a personal fortune estimated at $850 million. But Zhang, 51, has also emerged as China’s most outspoken tycoon on environmental issues.
It is a notable distinction, now that China has passed the United States as the world’s largest emitter of greenhouse gases.
When a Chinese vice minister and the Hong Kong secretary of the environment spoke enthusiastically at a conference in Hong Kong about their energy efficiency efforts, Zhang interrupted and disagreed in a sharp tone that Chinese entrepreneurs seldom take with government officials.
“There are laws on everything, but I do not think there are enough laws on energy consumption,” he said. “We need more laws.”
All this is not simply green altruism on Zhang’s part. He has a financial stake in environmentalism. His company, Broad Air Conditioning, is a world leader in the manufacture of central air-conditioning systems that use diesel or natural gas instead of electricity to cool office buildings, shopping malls and factories.
The systems, known as absorption chillers, cost much more to install but are less expensive to operate, with the number of years needed to break even dependent on local electricity rates. Absorption chillers are particularly popular in China because many factories already have diesel generators and diesel fuel storage tanks. As electricity demand in China grew 11.5 percent a year over the last decade, provincial governments periodically had to impose blackouts in industrial zones for up to three days a week to make sure that residential areas almost always had power. Factories buy diesel generators to maintain operations during blackouts.
Absorption chillers occupy an estimated one-fifth of China’s $2.5 billion annual market for central air-conditioning systems, according to Charles Oliver, a co-founder of GCiS, a market research company based in Beijing. Broad Air Conditioning is the absorption chiller market leader by revenue in China, and exports to markets around the world. The company is privately held, mostly by Zhang and his family, and does not release financial data. Absorption chillers have less than 1 percent of the American market, said Karim Amrane, the vice president for regulatory affairs and research at the Air-Conditioning, Heating and Refrigeration Institute, a trade group in Arlington, Virginia. “It’s simply too expensive,” he said.
The equipment tends to be more attractive in places with high electricity prices, and especially places with high prices during the afternoon, when power grids are already under stress and when air-conditioning systems need to work hardest. That gives Broad Air Conditioning a financial incentive to press for climate change policies that make it more expensive for electric utilities to burn coal, an inexpensive fuel in much of the world but also the dirtiest in terms of greenhouse gas emissions.
One obstacle for the company is that many developers build and sell commercial office projects, instead of holding on to them and renting them. So minimizing initial costs may be more important to them than reducing long-term electricity costs.
“How do you convince a developer to spend more money on a building that he’s just going to sell?” said Tom McCawley, a general manager of Evergreen Sustainable Development, a company based in Shanghai that plans air-conditioning and heating systems for large complexes.
In exporting to the United States and 67 other countries, Broad has marketed its products for corporate headquarters and other buildings that tend to be held for a long time by a single owner.
Zhang’s company is now branching out into the manufacture of heavily insulated, energy-efficient segments of buildings that can be quickly bolted together at a construction site. All of Broad’s buildings have insulation with a thickness of 15 centimetres to minimize the energy needed to cool or heat them.
As a demonstration project, Broad shipped to Cancun this autumn the components for a two-story building with floor space of 1,000 square meters. The components are designed for quick assembly at a site near the climate negotiations.
The project has the support of Rajendra K. Pachauri, the chairman of the Intergovernmental Panel on Climate Change, an advisory group to the U.N. climate talks. He said it was a way to draw attention to the need for energy-efficient construction around the world.
Mainland Chinese tycoons are known for keeping extremely low profiles and seldom speaking in public, for fear of antagonizing political leaders or attracting the attention of tax investigators. But Zhang, who insists that his commitment to environmentalism is genuine and separate from his business interests, may have more political protection than most Chinese tycoons.
He is an outspoken defender of the government’s unpopular one-child policy, for example, saying that humanity needs to reduce its population to protect the environment. Perhaps most important, he is a longtime apostle of energy efficiency at a time when China’s leadership has become deeply worried about energy security and eager to reduce the country’s ever-rising reliance on imported energy.
And while Zhang wants China to address global warming more directly, he reserves some of his bluntest criticisms for foreign governments.
“The United States is not limiting emissions,” he said, “so why should you ask China to do so?”