Turning green into gold: A review on the economics of green buildings

Journal of Cleaner Production

Volumn 172, Issue , 2018, Pages 2234-2245

  Zhang, Li ^a   Wu, Jing ^a   Liu, Hongyu ^a  

^a TSINGHUA UNIVERSITY   (China)

Author keywords

Cost benefit analysis; Developer; Economics; Green building; Life cycle; Occupant

Indexed keywords

EMISSION CONTROL; GAS EMISSIONS;

ACCOUNTING STANDARDS; CARBON ACCOUNTING; EMISSION TRADING SCHEME; EUROPEAN ENERGY EXCHANGES; FINANCIAL REPORTING; FINANCIAL STATEMENTS; INSTITUTIONAL DEVELOPMENT; INTERNATIONAL ACCOUNTING STANDARDS;

GREENHOUSE GASES;

EID: 85038850379     PISSN: 09596526     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jclepro.2017.11.188     Document Type: Review

References (122)

1. Achtnicht, M., Do environmental benefits matter? Evidence from a choice experiment among house owners in Germany. Ecol. Econ. 70 (2011), 2191–2200.
2. Akerlof, G.A., The market for “lemons”: quality uncertainty and the market mechanism. Q. J. Econ. 84 (1970), 488–500.
3. Alcott, B., Jevons’ paradox. Ecol. Econ. 54 (2005), 9–21.
4. Allcott, H., Taubinsky, D., The Lightbulb Paradox: Evidence from Two Randomized Experiments. NBER Working Paper Series 19713, 2015.
5. Allcott, H., Wozny, N., Gasoline prices, fuel economy, and the energy paradox. Rev. Econ. Stat. 96 (2014), 779–795.
6. Banerjee, A., Solomon, B.D., Eco-labeling for energy efficiency and sustainability: a meta-evaluation of US programs. Energy Policy 31 (2003), 109–123.
7. Banfi, S., Farsi, M., Filippini, M., Jakob, M., Willingness to pay for energy-saving measures in residential buildings. Energy Econ. 30 (2008), 503–516.
8. Bansal, P., Clelland, I., Talking trash: legitimacy, impression management, and unsystematic risk in the context of the natural environment. Acad. Manag. J. 47 (2004), 93–103.
9. Bartlett, E., Howard, N., Informing the decision makers on the cost and value of green building. Build. Res. Inf. 28 (2000), 315–324.
10. Bassen, A., Meyer, K., Schlange, J., The Influence of Corporate Responsibility on the Cost of Capital. SSRN Working Paper Series 984406, 2006.
11. Bateman, I.J., Carson, R.T., Day, B., Hanemann, M., Hanley, N., Hett, T., Jones-Lee, M., Loomes, G., Mourato, S., Özdemiroglu, E., Pearce, D.W., Sugden, R., Swanson, J., Economic Valuation with Stated Preference Techniques: a Manual. 2002, Edward Elgar Publishing Ltd, Cheltenham, UK.
12. Bianchini, F., Hewage, K., How “green” are the green roofs? Lifecycle analysis of green roof materials. Build. Environ. 48 (2012), 57–65.
13. Brager, G.S., de Dear, R.J., Thermal adaptation in the built environment: a literature review. Energy Build. 27 (1998), 83–96.
14. Brounen, D., Kok, N., On the economics of energy labels in the housing market. J. Environ. Econ. Manag. 62 (2011), 166–179.
15. Brounen, D., Kok, N., Quigley, J.M., Energy literacy, awareness, and conservation behavior of residential households. Energy Econ. 38 (2013), 42–50.
16. Bruegge, C., Carrión-Flores, C., Pope, J.C., Does the housing market value energy efficient homes? Evidence from the energy star program. Reg. Sci. Urban Econ. 57 (2015), 63–76.
17. Busse, M.R., Knittel, C.R., Zettelmeyer, F., Are consumers myopic? Evidence from new and used car purchases. Am. Econ. Rev. 103 (2013), 220–256.
18. Chau, C., Tse, M.S., Chung, K.Y., A choice experiment to estimate the effect of green experience on preferences and willingness-to-pay for green building attributes. Build. Environ. 45 (2010), 2553–2561.
19. Chegut, A., Eichholtz, P., Kok, N., Supply, demand and the value of green buildings. Urban Stud. 51 (2014), 22–43.
20. Chegut, A., Eichholtz, P., Holtermans, R., Energy efficiency and economic value in affordable housing. Energy Policy 97 (2016), 39–49.
21. Cole, R.J., Editorial: cost and value in building green. Build. Res. Inf. 28 (2000), 304–309.
22. Construction Industry Institute, Costs and Financial Benefits of Undertaking Green Building Assessments: Final Report., 2008 http://ira.lib.polyu.edu.hk/handle/10397/2352. (Accessed 13 November 2017)
23. Darko, A., Chan, A.P., Critical analysis of green building research trend in construction journals. Habitat Int. 57 (2016), 53–63.
24. Das, P., Tidwell, A., Ziobrowski, A., Dynamics of green rentals over market cycles: evidence from commercial office properties in San Francisco and Washington DC. J. Sust. Real Estate 3 (2011), 1–22.
25. Dastrup, S.R., Graff Zivin, J., Costa, D.L., Kahn, M.E., Understanding the solar home price premium: electricity generation and “green” social status. Eur. Econ. Rev. 56 (2012), 961–973.
26. Davis, L.W., Metcalf, G.E., Does Better Information Lead to Better Choices? Evidence from Energy-efficiency Labels. NBER Working Paper Series 20720, 2014.
27. De Silva, D.G., Pownall, R.A.J., Going green: does it depend on education, gender or income?. Appl. Econ. 46 (2014), 573–586.
28. De Wilde, P., The gap between predicted and measured energy performance of buildings: a framework for investigation. Autom. Constr. 41 (2014), 40–49.
29. Deng, Y., Wu, J., Economic returns to residential green building investment: the developers’ perspective. Reg. Sci. Urban Econ. 47 (2014), 35–44.
30. Deng, Y., Li, Z., Quigley, J.M., Economic returns to energy-efficient investments in the housing market: evidence from Singapore. Reg. Sci. Urban Econ. 42 (2012), 506–515.
31. Deuble, M.P., de Dear, R.J., Green occupants for green buildings: the missing link?. Build. Environ. 56 (2012), 21–27.
32. Dubin, J.A., McFadden, D.L., An econometric analysis of residential electric appliance holdings and consumption. Econometrica, 1984, 345–362.
33. Dwaikat, L.N., Ali, K.N., Green buildings cost premium: a review of empirical evidence. Energy Build. 110 (2016), 396–403.
34. Eichholtz, P., Kok, N., Quigley, J.M., Doing well by doing good? Green office buildings. Am. Econ. Rev. 100 (2010), 2492–2509.
35. Eichholtz, P., Kok, N., Yonder, E., Portfolio greenness and the financial performance of REITs. J. Int. Money Finan. 31 (2012), 1911–1929.
36. Eichholtz, P., Kok, N., Quigley, J.M., The economics of green building. Rev. Econ. Stat. 95 (2013), 50–63.
37. Eichholtz, P., Kok, N., Quigley, J.M., Ecological responsiveness and corporate real estate. Bus. Soc. 55 (2016), 330–360.
38. Fisher, R.J., Social desirability bias and the validity of indirect questioning. J. Consum. Res. 20 (1993), 303–315.
39. Fowler, K.M., Rauch, E.M., Henderson, J.W., Kora, A.R., Re-assessing Green Building Performance: a Post Occupancy Evaluation of 22 GSA Buildings. 2010, Pacific Northwest National Laboratory, Richland, WA.
40. Fuerst, F., McAllister, P., The impact of energy performance certificates on the rental and capital values of commercial property assets. Energy Policy 39 (2011), 6608–6614.
41. Fuerst, F., McAllister, P., Green noise or green value? Measuring the effects of environmental certification on office values. Real Estate Econ. 39 (2011), 45–69.
42. Fuerst, F., McAllister, P., Eco-labeling in commercial office markets: do LEED and Energy Star offices obtain multiple premiums?. Ecol. Econ. 70 (2011), 1220–1230.
43. Fuerst, F., Kontokosta, C., McAllister, P., Determinants of green building adoption. Environ. Plan. B Plan. Des. 41 (2014), 551–570.
44. Fuerst, F., McAllister, P., Nanda, A., Wyatt, P., Does energy efficiency matter to home-buyers? An investigation of EPC ratings and transaction prices in England. Energy Econ. 48 (2015), 145–156.
45. Fuerst, F., McAllister, P., Nanda, A., Wyatt, P., Energy performance ratings and house prices in Wales: an empirical study. Energy Policy 92 (2016), 20–33.
46. Gallagher, K.S., Muehlegger, E., Giving green to get green? Incentives and consumer adoption of hybrid vehicle technology. J. Environ. Econ. Manag. 61 (2011), 1–15.
47. Harvard gazette, Study Opens Door to Better Sleep, Work, Health. 2017 https://news.harvard.edu/gazette/story/2017/02/study-opens-the-door-to-better-sleep-work-and-health/. (Accessed 13 November 2017)
48. Hausman, J.A., Individual discount rates and the purchase and utilization of energy-using durables. Bell J. Econ. 10 (1979), 33–54.
49. Heinzle, S.L., Yip, A.B.Y., Xing, M.L.Y., The influence of green building certification schemes on real estate investor behaviour: evidence from Singapore. Urban Stud. 50 (2013), 1970–1987.
50. Henry, A., Frascaria-Lacoste, N., Comparing green structures using life cycle assessment: a potential risk for urban biodiversity homogenization?. Int. J. Life Cycle Assess. 17 (2012), 949–950.
51. Hu, H., Geertman, S., Hooimeijer, P., The willingness to pay for green apartments: the case of Nanjing, China. Urban Stud. 51 (2014), 3459–3478.
52. Hyland, M., Lyons, R.C., Lyons, S., The value of domestic building energy efficiency - evidence from Ireland. Energy Econ. 40 (2013), 943–952.
53. International Energy Agency, Transition to Sustainable Buildings: Strategies and Opportunities to 2050. 2013 https://www.iea.org/etp/buildings/. (Accessed 13 November 2017)
54. Issa, M.H., Rankin, J.H., Christian, A.J., Canadian practitioners’ perception of research work investigating the cost premiums, long-term costs and health and productivity benefits of green buildings. Build. Environ. 45 (2010), 1698–1711.
55. Jaffe, A.B., Stavins, R.N., The energy paradox and the diffusion of conservation technology. Resour. Energy Econ. 16 (1994), 91–122.
56. Jakob, M., Marginal costs and co-benefits of energy efficiency investments: the case of the Swiss residential sector. Energy Policy 34 (2006), 172–187.
57. Jiang, Y., Understanding the Cost of Green Buildings: Evidence from Singapore. (Master dissertation), 2010, National University of Singapore. Department of Real Estate.
58. Jo, J.H., Golden, J.S., Shin, S.W., Incorporating built environment factors into climate change mitigation strategies for Seoul, South Korea: a sustainable urban systems framework. Habitat Int. 33 (2009), 267–275.
59. Kahn, M.E., Kok, N., The capitalization of green labels in the California housing market. Reg. Sci. Urban Econ. 47 (2014), 25–34.
60. Kahn, M.E., Kok, N., Quigley, J.M., Carbon emissions from the commercial building sector: the role of climate, quality, and incentives. J. Public Econ. 113 (2014), 1–12.
61. Kats, G., The Costs and Financial Benefits of Green Buildings. 2003, Capital E, Washington, DC.
62. Kats, G., Greening America's Schools: Costs and Benefits. 2006, Capital E, Washington, DC.
63. Khazzoom, J.D., Economic implications of mandated efficiency in standards for household appliances. Energy J. 1 (1980), 21–40.
64. Koirala, B.S., Bohara, A.K., Berrens, R.P., Estimating the net implicit price of energy efficient building codes on U.S. households. Energy Policy 73 (2014), 667–675.
65. Kok, N., Jennen, M., The impact of energy labels and accessibility on office rents. Energy Policy 46 (2012), 489–497.
66. Kok, N., McGraw, M., Quigley, J.M., The diffusion of energy efficiency in building. Am. Econ. Rev. 101 (2011), 77–82.
67. Kwak, S., Yoo, S., Kwak, S., Valuing energy-saving measures in residential buildings: a choice experiment study. Energy Policy 38 (2010), 673–677.
68. Kőszegi, B., Szeidl, A., A model of focusing in economic choice. Q. J. Econ. 128 (2013), 53–104.
69. Langdon, Davis, Costing Green: a Comprehensive Cost Database and Budgeting Methodology. 2004 https://www.usgbc.org/resources/costing-green-comprehensive-cost-database-and-budgeting-methodology. (Accessed 13 November 2017)
70. Langdon, Davis, Cost of Green Revisited: Reexamining the Feasibility and Cost Impact of Sustainable Design in the Light of Increased Market Adoption. 2007 http://sustainability.ucr.edu/docs/leed-cost-of-green.pdf. (Accessed 13 November 2017)
71. Langdon, Davis, The Costs and Benefits of Achieving Green Buildings. 2007 https://www.usgbc.org/Docs/Archive/General/Docs2583.pdf. (Accessed 13 November 2017)
72. Lau, L.C., Tan, K.T., Lee, K.T., Mohamed, A.R., A comparative study on the energy policies in Japan and Malaysia in fulfilling their nations’ obligations towards the Kyoto Protocol. Energy Policy 37 (2009), 4771–4778.
73. Levinson, A., How much energy do building energy codes save? Evidence from California houses. Am. Econ. Rev. 106 (2016), 2867–2894.
74. Lin, B., Liu, H., A study on the energy rebound effect of China's residential building energy efficiency. Energy Build. 86 (2015), 608–618.
75. Madew, R., The Dollars and Sense of Green Buildings. 2006 https://www.usgbc.org/resources/dollars-and-sense-green-buildings-2006-building-business-case-green-commercial-buildings-a. (Accessed 17 November 2017)
76. McFadden, D., Conditional logit analysis of qualitative choice behavior. Zarembka, P., (eds.) Frontiers in Econometrics, 1973, Academic Press, New York, 105–142.
77. MOHURD of China, Research and practice of post-occupancy evaluation of green buildings in China. Constr. Sci. Technol., 2014, 28–32 (in Chinese).
78. MOHURD of China, 2014 statistic report of green buildings. Constr. Sci. Technol., 2015, 20–23 (in Chinese).
79. Nelson, P., Information and consumer behavior. J. Polit. Econ. 78 (1970), 311–329.
80. New Ecology and Green CDCs Initiative, The Costs and Benefits of Green Affordable Housing: Opportunities for Action. 2005 https://www.newecology.org/wp-content/uploads/2017/08/The-Costs-Benefits-of-Green-Affordable-Housing.pdf. (Accessed 13 November 2017)
81. Newsham, G.R., Mancini, S., Birt, B.J., Do LEED-certified buildings save energy? Yes, but. Energy Build. 41 (2009), 897–905.
82. Ouyang, J., Long, E., Hokao, K., Rebound effect in Chinese household energy efficiency and solution for mitigating it. Energy 35 (2010), 5269–5276.
83. Park, M., Hagishima, A., Tanimoto, J., Chun, C., Willingness to pay for improvements in environmental performance of residential buildings. Build. Environ. 60 (2013), 225–233.
84. Paul, W.L., Taylor, P.A., A comparison of occupant comfort and satisfaction between a green building and a conventional building. Build. Environ. 43 (2008), 1858–1870.
85. Rehm, M., Ade, R., Construction costs comparison between 'green’ and conventional office buildings. Build. Res. Inf. 41 (2013), 198–208.
86. Reichardt, A., Operating expenses and the rent premium of Energy Star and LEED certified buildings in the central and eastern U.S. J. Real Estate Financ. Econ. 49 (2014), 413–433.
87. Rider Levett Bucknall, Quarterly Construction Cost Update. 2017 http://assets.rlb.com/production/2017/08/07065327/RLB-Construction-Cost-Update-HK-Q2-2017-English-Version.pdf. (Accessed 30 June 2017)
88. Ries, R., Bilec, M.M., Gokhan, N.M., Needy, K.L., The economic benefits of green buildings: a comprehensive case study. Eng. Econ. 51 (2006), 259–295.
89. Robinson, S., Simons, R., Lee, E., Kern, A., Demand for green buildings: office tenants’ stated willingness-to-pay for green features. J. Real Estate Res. 38 (2016), 423–452.
90. Rocky Mountain Institute, Greening the Building and the Bottom Line: Increasing Productivity through Energy Efficient Design. 1998 http://library.uniteddiversity.coop/Ecological_Building/Greening_the_Building_and_the_Bottom_Line.pdf. (Accessed 13 November 2017)
91. Sabapathy, A., Ragavan, S.K.V., Vijendra, M., Nataraja, A.G., Energy efficiency benchmarks and the performance of LEED rated buildings for information technology facilities in Bangalore, India. Energy Build. 42 (2010), 2206–2212.
92. Sallee, J.M., Rational inattention and energy efficiency. J. Law Econ., 57, 2014.
93. Scofield, J.H., Do LEED-certified buildings save energy? Not really. Energy Build. 41 (2009), 1386–1390.
94. Scotchmer, S., Hedonic prices and cost/benefit analysis. J. Econ. Theory 37 (1985), 55–75.
95. Shapiro, C., Premiums for high quality products as returns to reputations. Q. J. Econ. 98 (1983), 659–679.
96. Simcoe, T., Toffel, M.W., Government green procurement spillovers: evidence from municipal building policies in California. J. Environ. Econ. Manag. 68 (2014), 411–434.
97. Sustainable Energy Authority of Ireland, A Guide to Building Energy Rating for Homeowners. 2017 https://www.seai.ie/resources/publications/Your-Guide-to-Building-Energy-Rating.pdf. (Accessed 25 August 2017)
98. Tam, V.W., Tam, C.M., Waste reduction through incentives: a case study. Build. Res. Inf. 36 (2008), 37–43.
99. Target Zero, Guidance on the Design and Construction of Sustainable, Low Carbon Office Buildings. 2012 https://www.steelconstruction.info/images/8/81/Office_guidance_doc_v2.pdf. (Accessed 13 November 2017)
100. Tong, Z., Chen, Y., Malkawi, A., Liu, Z., Freeman, R.B., Energy saving potential of natural ventilation in China: the impact of ambient air pollution. Appl. Energy 179 (2016), 660–668.
101. Turner, C., Frankel, M., Energy Performance of LEED for New Construction Buildings. 2008 https://www.usgbc.org/Docs/Archive/General/Docs3930.pdf. (Accessed 13 November 2017)
102. U.S. General Services Administration, LEED Cost Study. 2004 https://archive.epa.gov/greenbuilding/web/pdf/gsaleed.pdf. (Accessed 13 November 2017)
103. Wiencke, A., Willingness to pay for green buildings: empirical evidence from Switzerland. J. Sust. Real Estate 5 (2014), 111–130.
104. Wiley, J.A., Benefield, J.D., Johnson, K.H., Green design and the market for commercial office space. J. Real Estate Financ. Econ. 41 (2010), 228–243.
105. World Green Building Council, The Business Case for Green Building - a Review of the Costs and Benefits for Developers, Investors and Occupants. 2013 http://www.worldgbc.org/news-media/business-case-green-building-review-costs-and-benefits-developers-investors-and-occupants. (Accessed 13 November 2017)
106. Wu, H.J., Yuan, Z.W., Zhang, L., Bi, J., Life cycle energy consumption and CO2 emission of an office building in China. Int. J. Life Cycle Assess. 17 (2012), 105–118.
107. Yeheyis, M., Hewage, K., Alam, M.S., Eskicioglu, C., Sadiq, R., An overview of construction and demolition waste management in Canada: a lifecycle analysis approach to sustainability. Clean Technol. Environ. Policy 15 (2013), 81–91.
108. Yip, S., Li, H., Song, L., Study on the Economics of Green Buildings in China. first ed., 2013, China Architecture & Building Press, Beijing (in Chinese).
109. Yoshida, J., Sugiura, A., The effects of multiple green factors on condominium prices. J. Real Estate Financ. Econ. 50 (2014), 412–437.
110. Yudelson, J., The Green Building Revolution. 2010, Island Press, Washington, DC.
111. Zhang, X., Green real estate development in China: state of art and prospect agenda - a review. Renew. Sust. Energy Rev. 47 (2015), 1–13.
112. Zhang, Y., Altan, H., A comparison of the occupant comfort in a conventional high-rise office block and a contemporary environmentally-concerned building. Build. Environ. 46 (2011), 535–545.
113. Zhang, X., Shen, L., Wu, Y., Green strategy for gaining competitive advantage in housing development: a China study. J. Clean. Prod. 19 (2011), 157–167.
114. Zhang, X., Platten, A., Shen, L., Green property development practice in China: costs and barriers. Build. Environ. 46 (2011), 2153–2160.
115. Zhang, L., Sun, C., Liu, H., Zheng, S., The role of public information in increasing homebuyers’ willingness-to-pay for green housing: evidence from Beijing. Ecol. Econ. 129 (2016), 40–49.
116. Zhang, L., Liu, H., Wu, J., The price premium for green-labelled housing: evidence from China. Urban Stud. 54 (2016), 3524–3541.
117. Zhang, L., Wu, J., Liu, H., Zhang, X., The value of going green in the hotel industry: evidence from Beijing. Real Estate Econ., 2017, 10.1111/1540-6229.12225.
118. Zheng, S., A Microeconomic Analysis of Housing Demand in China. 2007, China Architecture & Building Press, Beijing (in Chinese).
119. Zheng, S., Wu, J., Kahn, M.E., Deng, Y., The nascent market for “green” real estate in Beijing. Eur. Econ. Rev. 56 (2012), 974–984.
120. Zhou, Y., State power and environmental initiatives in China: analyzing China's green building program through an ecological modernization perspective. Geoforum 61 (2015), 1–12.
121. Zhu, Y., Lin, B., Sustainable housing and urban construction in China. Energy Build. 36 (2004), 1287–1297.
122. Zuo, J., Zhao, Z., Green building research–current status and future agenda: a review. Renew. Sust. Energy Rev. 30 (2014), 271–281.