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

  • Author(s)/Creator(s):
    Li Zhang
    Jing Wu
    Hongyu Liu
  • Publisher(s)/Producter(s):

Adoption of green design and technology in buildings, which can mitigate negative impacts on the environment, has been recognized as a key step towards global sustainable development. In addition to technology development, economic viability plays a pivotal role in stimulating the design, construction and use of green buildings. This paper provides a comprehensive review of recent studies on the economic viability of “going green”, including cost-benefit analyses from the perspective of building life cycle and from the perspective of major market participants. While “going green” is more likely to be seen as profitable from the building life cycle perspective, economic viability, from the perspective of developers and occupants, remains unclear due to information, behavior and policy factors. Such discrepancy in the results regarding economic viability is one major reason for the “paradox” of the very gradual diffusion of apparently cost-effective green buildings in most economies. We also propose several key topics that merit future research, including more comprehensive evidence about life-cycle costs and benefits of green buildings, the incorporation of ancillary long-term or intangible benefits in the analysis of economic viability for developers and occupants, an investigation on the dynamics of the adoption of green buildings, and institutional arrangements for stimulating green practices in the building sector.

National Natural Science Foundation of China | Tsinghua University Initiative Scientific Research Program | Urban China Initiative | China Scholarship Council | Peking University Lincoln Institute Center for Urban Development and Land Policy
Policy Quality
Personal Finance
Corporate Finance
Public Finance