Chief Engineer Wang, thank you for the warm introduction. Vice Minister Qiu, thank you for inviting me - I am delighted to be here today and believe my message about setting big and bold goals and going after them is particularly relevant to participants assembled for this important third annual Intelligent, Green and Energy Efficient Building Conference.
If I may add a few words to Chief Engineer Wang’s introduction about United Technologies - last year, UTC Chairman and Chief Executive Officer George David told the audience assembled at this forum that China is important to UTC and we are committed to responsible operations here to support your twin goals of increasing GDP and reducing energy intensity. UTC has the expertise and technology and products to help China reach those important goals.
UTC has a long history in China dating back for more than one century. Today we employ more than 214,000 people worldwide, two thirds of those employees work outside the United States, including almost 14,000 here in China. UTC, Carrier, and the other United Technologies businesses are China’s partner to create the next generation of sustainable cities, which are vital to continued modernization and national development and continued progress in raising the quality of life.
Nearly half of global new construction between now and 2015 will occur in China. China has the unique opportunity to take a leadership position in green building, construction practices, and sustainable urban development.
When UTC Chairman George David was in Beijing last year he addressed the World Business Council for Sustainable Development - telling the assembled group that UTC and the World Business Council share many of the same goals and commitments. He announced a project with Lafarge and other corporate sponsors to reduce energy intensity in the entire building cycle. The project team set a big and a bold goal: energy self sufficient buildings with zero CO2 emissions commercially viable by the year 2050. One year later, project participants are ready to report on their initial findings – examining the critical factors essential to move towards zero net energy. As they enter the next phase of the project – they will identify how to overcome the barriers to improved energy efficiency. Zero net energy consumption is a big, bold and important goal.
Urbanization is transforming countries and challenging resources, no one knows this better than you. UTC wants to partner with China to be a world leader in green building and sustainable design. Many here may recall that last year George David commended China for being out in front on making commitments to reduce greenhouse gases. Vice Minister of Construction Qiu called for all Chinese cities to reduce their buildings’ energy use by 50 percent by 2010 and 65% by 2020. These are big and bold targets and we applaud the effort.
Let me take a moment to remind this audience that in 2007 the world will mark the 20th anniversary of the Montreal Protocol – we congratulate China’s commitment to ozone protection, especially the accelerated phase-out of CFC refrigerants and the commitment to non-ozone depleting alternatives, like those at the Olympic Games. The next challenge will be the phaseout of HCFCs which also deplete the ozone layer and we are looking forward to working with China to achieve that ambitious but important mandate. Life on earth only formed after the protective ozone layer was in place – so we must all do what we can to protect the ozone shield. China’s continued leadership on this issue is essential to protecting this precious earth. Carrier Corporation has a rich history of environmental leadership with our products. We develop and bring to market advanced technologies to improve energy efficiency, protect the ozone layer and improve indoor air quality.
UTC does not choose between responsibility and profitability; it pursues both with discipline and focus. In China and around the world, UTC holds itself to the strictest environmental standards - working relentlessly to minimize its impact on the planet, reducing energy and water usage, hazardous waste and air emissions while providing employees with a safe and healthy workplace. We set our first Environmental, Health and Safety goals in 1991 and have publicly reported performance ever since.
In the past decade, UTC has decreased worldwide energy use by 19% worldwide while the company has doubled in size. If normalized for volume, our energy intensity is down 59%. Water use is down 49% and longer term we have reduced hazardous waste and air emissions, as reported to the U.S. Environmental Protection Agency, by 89 and 98% respectively since 1990.
United Technologies has set new and bold goals for Environmental, Health and Safety performance from now to 2010. In 2007, we embark on a new four-year program to reduce greenhouse gas emissions by 12%, water consumption by 10% and non-recyclable waste by 30%, all on an absolute basis as compared to 2006. A significant change is that the energy and water metrics will no longer be normalized for volume and instead will be tracked in absolute terms. Our new greenhouse gas reduction target, equivalent to taking more than 50,000 cars off the road, is aggressive, as our performance to date has averaged 2 percent reduction annually.
UTC considers energy efficiency and environmental concerns in all of our products, from conception and design, to use in the market. UTC has seven key businesses and the results of our efforts in each of these businesses can be seen in many products that will help enable China’s next generation of sustainable cities, including:
- Carrier’s new chiller technology that achieves world-class energy efficiency with zero ozone impact and
- UTC Power’s zero-emission hydrogen fuel cells, already deployed in China,
- Otis’s energy-saving, gearless, regenerative elevators and
- integrated microturbine and absorption chiller systems that convert more than 80% of fuel input to electric, cooling and heating output
- and a multitude of systems that will give the new Boeing 787 a 20% fuel efficiency gain over current-generation equipment.
Since first shipping elevators to China in 1888, Otis’ presence has expanded tremendously. When the Ministry of Construction invited UTC one year ago to help support China’s green building movement, Otis responded immediately by planning its own environmentally advanced building in the Tianjin Economic Development Area. Otis began construction in 2006 and is moving quickly towards full occupancy. When it is finished, Otis will produce Gen2 elevators and gearless systems. Think about the circle - an environmentally responsible building producing environmentally responsible products for other buildings.
If I may be allowed to take a few minutes to discuss Carrier Corporation, United Technologies largest business unit and our commitment to, and investment in, China. With two decades of experience in China, Carrier is a pioneer in China’s central air-conditioning and refrigeration markets. Carrier was the first American air-conditioning manufacturer to invest in the China market in the 1980s. We have seven operations in China with more than 2,500 employees and over 40 sales branch offices across the country.
China is one of the largest air conditioning markets in the world. It is dynamic and fast growing. Customers’ demands are becoming diversified with different applications and industries. The China market requires the most advanced technology and the highest quality products. The increasing awareness by consumers and building owners on environmental protection and energy efficiency will also drive the demand for improved technologies. By taking advantage of local operations, Carrier will design and manufacture air conditioning products that specifically meet the requirements of local China customers. Of great importance to meeting those targets is that Carrier has achieved employee localization of 99% in China. We believe a highly educated and talented workforce is a key factor for our sustainable development and we always emphasize the recruitment of qualified local employees and personnel training.
With the China HVAC market expected to grow 40% by 2010, investments here are key to our future growth…in China…in Asia…and around the world. Three years ago, Carrier invested US $15 million in a compressor center and two years ago built a global research and development center. Last year, Carrier established a second airside manufacturing base in West China’s Chengdu City – bringing our total investment in China to about $190 million. This investment demonstrates Carrier’s strong commitment to serve the important and growing China market.
This new research and development center will be one of 18 global research and development centers globally, which keeps us as close as possible to our customers. The China research and development center gives us access to a wealth of talent in HVAC-related disciplines. Over the next 3 years, more than 150 people will be dedicated to the research of cutting-edge technologies and products here in China.
Carrier products and solutions match the requirements of China. You’ll find Carrier in many locations including the Beijing Capital International Airport, Shanghai International Airport, the under-construction Shanghai World Financial Center, Beijing Silvertie Center, Chongqing International Exhibition Center, as well as, Beijing Olympic venues such as the “Bird’s Nest” National Stadium and Wu Ke Song Basketball Hall.
China’s big goal to have the first “green” Olympics is commendable. It is great for China – and great for the world. Carrier is supplying a full line of products for Olympic venues which have been installed with non-ozone depleting refrigerants and we are delivering innovative solutions to support the games. For example, Carrier provided the “Water Cube”-National Swimming Center” with high efficiency centrifugal chillers with a unique heat recovery option, which utilizes more than 50% of the exhaust heat to warm the swimming pool – aligning an innovative energy saving solution with the Olympic theme to be “green.”
Energy efficiency and environmental stewardship is a top priority for Carrier’s product development. As China continues to set big reduction goals to offset environmental and resource constraints, it is important to know that Carrier has always been dedicated to producing and promoting innovative technologies to provide environmental stewardship and energy efficiency. This focus is in line with Carrier’s purpose – to make the world a better place to live by creating a comfortable, productive and healthy environment, regardless of climate.
Carrier was the first to implement the worldwide phase-out of CFCs in the heating, ventilation and air conditioning industry; the first to design non-ozone depleting chillers in the world; and the first to apply environmentally sound refrigerants in a full line of products in China. Carrier phased out CFCs globally in 1994, 16 years ahead of requirements in China.
United Technologies grows by engineering new possibilities globally. Our businesses tackle worldwide issues and our products transform markets through relentless innovation. UTC’s products make cities more efficient, people more secure and travel more comfortable - serving the present while preparing for the future. We are committed to supporting China with its strong history, culture, growth and environmental agenda.
We salute the Ministry of Construction for their commitments to Green Buildings. Carrier is a founding member of both the US, and the India, Green Building Council and look forward to working with China on their journey to create such a council.
As I end my comments this afternoon – I urge the assembled to continue to set big and bold goals…and drive after them with a passion. Michelangelo, the Italian Renaissance thought leader once said, “The greater danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.”
At United Technologies we will continue to set big goals…and we will go after them. Big goals get big results. We look forward to working with, and partnering with China to achieve your big results.
