Skip to main content
Disciplines
Automotive Business IT + Informatics Construction + Real Estate Electrical Engineering + Electronics Energy + Sustainability Insurance + Risk Finance + Banking Management + Leadership Marketing + Sales Mechanical Engineering + Materials
DE
EN
Books
Journals
Events
Topic Page
Marketing
Log in
Learn more about individual access
Request company access
Electric Powertrains and Energy Systems 2025 | 26 + 27 March 2025

19th International MTZ Congress on Future Powertrains

Take this opportunity to attend the conference. Experts from the automotive industry, energy providers, and grid operators will meet up with representatives from politics and science to discuss important topics for this sector.
EXTENDED SEARCH
Log in
Top
Published in:
Read chapter Read first chapter

2024 | OriginalPaper | Chapter

12. Costs and Pricing of Green Buildings

Authors : Yongsheng Jiang, Dong Zhao, Zihao Xu, Yunjia Zhang, Zhongyi Men, Tao Hu

Published in: Circular Economy for Buildings and Infrastructure

Publisher: Springer International Publishing

Log in

Activate our intelligent search to find suitable subject content or patents.

search-config
loading …

Abstract

Green buildings offer an effective solution to reduce carbon emissions, energy consumption, and promote sustainable development. Therefore, it is crucial to promote the growth of green buildings to achieve a circular economy in the construction industry. However, the price premium associated with green buildings, including incremental costs from developers, affects homebuyers’ willingness to pay. Thus, understanding these costs and pricing factors is essential to develop effective green building policies. This chapter provides a comprehensive review of incremental costs, price premiums, and willingness to pay for green buildings. The findings show that although incremental costs remain a challenge to green building development, the critical issue is the poor willingness to pay. Public policies should prioritize the interests of different stakeholders and motivate developers and homebuyers to actively participate in the green building movement.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

  • über 102.000 Bücher
  • über 537 Zeitschriften

aus folgenden Fachgebieten:

  • Automobil + Motoren
  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Elektrotechnik + Elektronik
  • Energie + Nachhaltigkeit
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Maschinenbau + Werkstoffe
  • Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Technik"

Online-Abonnement

Mit Springer Professional "Technik" erhalten Sie Zugriff auf:

  • über 67.000 Bücher
  • über 390 Zeitschriften

aus folgenden Fachgebieten:

  • Automobil + Motoren
  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Elektrotechnik + Elektronik
  • Energie + Nachhaltigkeit
  • Maschinenbau + Werkstoffe




 

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

  • über 67.000 Bücher
  • über 340 Zeitschriften

aus folgenden Fachgebieten:

  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Versicherung + Risiko




Jetzt Wissensvorsprung sichern!

inform now
previous chapter The Impact of Transportation and Emissions Allocation on the Global Warming Potential of Concretes Containing Alternative Binders and Fillers
next chapter C&D Waste Recycling and Management: Chinese Practices
Literature
Abidin, N. Z., & Azizi, N. Z. M. (2021). Soft cost elements: Exploring management components of project costs in green building projects. Environmental Impact Assessment Review, 87, 106545.CrossRef
Abraham, P. S., & Gundimeda, H. (2020). Greening offices: Willingness to pay for green-certified office spaces in Bengaluru, India. Environment, Development and Sustainability, 22, 1839–1857.CrossRef
AlAwam, Y. S., & Alshamrani, O. S. (2021). Initial cost assessment stochastic model for green buildings based on LEED score. Energy and Buildings, 245(111), 045.
Allen, J. G., MacNaughton, P., Satish, U., Santanam, S., Vallarino, J., & Spengler, J. D. (2016). Associations of cognitive function scores with carbon dioxide, ventilation, and volatile organic compound exposures in office workers: A controlled exposure study of green and conventional office environments. Environmental Health Perspectives, 124(6), 805–812.CrossRef
Al-Surf, M., Balabel, A., Alwetaishi, M., Abdelhafiz, A., Issa, U., Sharaky, I., Shamseldin, A., & Al-Harthi, M. (2021). Stakeholder’s perspective on green building rating systems in Saudi Arabia: The case of LEED, Mostadam, and the SDGs. Sustainability, 13(15), 8463.CrossRef
Bianchini, F., & Hewage, K. (2012). How “green” are the green roofs? Lifecycle analysis of green roof materials. Building and Environment, 48, 57–65.CrossRef
Bonde, M. (2012). Difficulties in changing existing leases–one explanation of the “energy paradox”? Journal of Corporate Real Estate, 14(1), 63–76.MathSciNetCrossRef
Bruegge, C., Carrión-Flores, C., & Pope, J. C. (2016). Does the housing market value energy efficient homes? Evidence from the energy star program. Regional Science and Urban Economics, 57, 63–76.CrossRef
Chau, C. K., Tse, M. S., & Chung, K. Y. (2010). A choice experiment to estimate the effect of green experience on preferences and willingness-to-pay for green building attributes. Building and Environment, 45(11), 2553–2561.CrossRef
Chegut, A., Eichholtz, P., & Holtermans, R. (2016). Energy efficiency and economic value in affordable housing. Energy Policy, 97, 39–49.CrossRef
Cohen, C., Pearlmutter, D., & Schwartz, M. (2019). Promoting green building in Israel: A game theory-based analysis. Building and Environment, 163, 106227.CrossRef
Copiello, S., & Donati, E. (2021). Is investing in energy efficiency worth it? Evidence for substantial price premiums but limited profitability in the housing sector. Energy and Buildings, 251, 111371.CrossRef
Council, W. G. B. (2013). The business case for green building: A review of the costs and benefits for developers, investors and occupants.
Darko, A., & Chan, A. P. (2017). Review of barriers to green building adoption. Sustainable Development, 25(3), 167–179.CrossRef
Dell’Anna, F., & Bottero, M. (2021). Green premium in buildings: Evidence from the real estate market of Singapore. Journal of Cleaner Production, 286, 125327.CrossRef
Deng, Y., & Wu, J. (2014). Economic returns to residential green building investment: The developers’ perspective. Regional Science and Urban Economics, 47, 35–44.CrossRef
Deng, Y., Li, Z., & Quigley, J. M. (2012). Economic returns to energy-efficient investments in the housing market: Evidence from Singapore. Regional Science and Urban Economics, 42(3), 506–515.CrossRef
Devine, A., & McCollum, M. (2019). Understanding social system drivers of green building innovation adoption in emerging market countries: The role of foreign direct investment. Cities, 92, 303–317.CrossRef
Durdyev, S., & Tokbolat, S. (2022). A quantified model for assessment of drivers of acquiring green buildings by potential clients. Environment, Development and Sustainability, 24(3), 3815–3831.CrossRef
Dwaikat, L. N., & Ali, K. N. (2016). Green buildings cost premium: A review of empirical evidence. Energy and Buildings, 110, 396–403.CrossRef
Eichholtz, P., Kok, N., & Quigley, J. M. (2010). Doing well by doing good? Green office buildings. American Economic Review, 100(5), 2492–2509.CrossRef
Eichholtz, P., Kok, N., & Quigley, J. M. (2013). The economics of green building. Review of Economics and Statistics, 95(1), 50–63.CrossRef
Feng, Q., Wang, Y., Chen, C., Dong, Z., & Shi, X. (2021). Effect of homebuyer comment on green housing purchase intention—mediation role of psychological distance. Frontiers in Psychology, 12, 568451.CrossRef
Franco, M. A. J. Q., Pawar, P., & Wu, X. (2021). Green building policies in cities: A comparative assessment and analysis. Energy and Buildings, 231, 110561.CrossRef
Fuerst, F., & McAllister, P. (2011). Green noise or green value? Measuring the effects of environmental certification on office values. Real Estate Economics, 39(1), 45–69.CrossRef
Fuerst, F., Oikarinen, E., & Harjunen, O. (2016). Green signalling effects in the market for energy-efficient residential buildings. Applied Energy, 180, 560–571.CrossRef
Gabay, H., Meir, I. A., Schwartz, M., & Werzberger, E. (2014). Cost-benefit analysis of green buildings: An Israeli office buildings case study. Energy and Buildings, 76, 558–564.CrossRef
Gao, Y., Yang, G., & Xie, Q. (2020). Spatial-temporal evolution and driving factors of green building development in China. Sustainability, 12(7), 2773.CrossRef
Golbazi, M., El Danaf, A., & Aktas, C. B. (2020). Willingness to pay for green buildings: A survey on students’ perception in higher education. Energy and Buildings, 216, 109956.CrossRef
He, L., & Chen, L. (2021). The incentive effects of different government subsidy policies on green buildings. Renewable and Sustainable Energy Reviews, 135, 110123.CrossRef
Heerwagen, J. (2000). Green buildings, organizational success and occupant productivity. Building Research and Information, 28(5–6), 353–367.CrossRef
Heinzle, S. L., Yip, A. B. Y., & Xing, M. L. Y. (2013). The influence of green building certification schemes on real estate investor behaviour: Evidence from Singapore. Urban Studies, 50(10), 1970–1987.CrossRef
Hopkins, E. A. (2015). LEED certification of campus buildings: A cost-benefit approach. Journal of Sustainable Real Estate, 7(1), 99–111.CrossRef
Hu, H., Geertman, S., & Hooimeijer, P. (2014). The willingness to pay for green apartments: The case of Nanjing, China. Urban Studies, 51(16), 3459–3478.CrossRef
Hwang, B. G., & Leong, L. P. (2013). Comparison of schedule delay and causal factors between traditional and green construction projects. Technological and Economic Development of Economy, 19(2), 310–330.CrossRef
Hwang, B. G., & Tan, J. S. (2012). Green building project management: Obstacles and solutions for sustainable development. Sustainable Development, 20(5), 335–349.CrossRef
Hwang, B. G., Zhu, L., Wang, Y., & Cheong, X. (2017). Green building construction projects in Singapore: Cost premiums and cost performance. Project Management Journal, 48(4), 67–79.CrossRef
Hyland, M., Lyons, R. C., & Lyons, S. (2013). The value of domestic building energy efficiency—evidence from Ireland. Energy Economics, 40, 943–952.CrossRef
IEA. (2019). Global status report for buildings and construction.
Jang, D. C., Kim, B., & Kim, S. H. (2018). The effect of green building certification on potential tenants’ willingness to rent space in a building. Journal of Cleaner Production, 194, 645–655.CrossRef
Jiang, H., & Payne, S. (2022). Examining regime complexity in China’s green housing transition: A housing developers’ perspective. Building Research and Information, 50(3), 291–307.CrossRef
Jiang, Y., Xing, Y., Zhao, D., & Jiao, R. (2021). Resale of green housing compensates for its premium pricing: An empirical study of China. Journal of Green Building, 16(4), 45–61.CrossRef
Jiang, Y., Hu, T., Zhao, D., Liu, B., Zhang, H., Zhang, Y., & Xu, Z. (2022). Decision model to optimize long-term subsidy strategy for green building promotion. Sustainable Cities and Society, 86, 104126.CrossRef
Kahn, M. E., & Kok, N. (2014). The capitalization of green labels in the California housing market. Regional Science and Urban Economics, 47, 25–34.CrossRef
Kats, G. (2003). Green building costs and financial benefits.
Kong, F., & He, L. (2021). Impacts of supply-sided and demand-sided policies on innovation in green building technologies: A case study of China. Journal of Cleaner Production, 294, 126279.CrossRef
Li, S., Lu, Y., Kua, H. W., & Chang, R. (2020). The economics of green buildings: A life cycle cost analysis of non-residential buildings in tropic climates. Journal of Cleaner Production, 252, 119771.CrossRef
Liu, Y., Guo, X., & Hu, F. (2014). Cost-benefit analysis on green building energy efficiency technology application: A case in China. Energy and Buildings, 82, 37–46.CrossRef
Mangialardo, A., Micelli, E., & Saccani, F. (2018). Does sustainability affect real estate market values? Empirical evidence from the office buildings market in Milan (Italy). Sustainability, 11(1), 12.CrossRef
Mao, Y. H., & Yang, G. H. (2012). Sustainable development drivers for green buildings: Incremental costs-benefits analysis of green buildings. In Advanced materials research (Vol. 374, pp. 76–81). Trans Tech Publications Ltd..
McCoy, A. P., Zhao, D., Ladipo, T., Agee, P., & Mo, Y. (2018). Comparison of green home energy performance between simulation and observation: A case of Virginia, United States. Journal of Green Building, 13(3), 70–88.CrossRef
Menassa, C. C., & Baer, B. (2014). A framework to assess the role of stakeholders in sustainable building retrofit decisions. Sustainable Cities and Society, 10, 207–221.CrossRef
Mesthrige, J. W., & Chan, H. T. (2019). Environmental certification schemes and property values: Evidence from the Hong Kong prime commercial office market. International Journal of Strategic Property Management, 23(2), 81–95.CrossRef
Miraj, P., Berawi, M. A., & Utami, S. R. (2021). Economic feasibility of green office building: Combining life cycle cost analysis and cost–benefit evaluation. Building Research and Information, 49(6), 624–638.CrossRef
Mo, Y., Zhao, D., McCoy, A., Du, J., & Agee, P. (2017). Latent relationship between construction cost and energy efficiency in multifamily green buildings. In Computing in Civil Engineering 2017 (pp. 273–280).CrossRef
Mollaoglu, S., Chergia, C., Ergen, E., & Syal, M. (2016). Diffusion of green building guidelines as innovation in developing countries. Construction Innovation.
Ofek, S., & Portnov, B. A. (2020). Differential effect of knowledge on stakeholders’ willingness to pay green building price premium: Implications for cleaner production. Journal of Cleaner Production, 251, 119575.CrossRef
Olubunmi, O. A., Xia, P. B., & Skitmore, M. (2016). Green building incentives: A review. Renewable and Sustainable Energy Reviews, 59, 1611–1621.CrossRef
Onishi, J., Deng, Y., & Shimizu, C. (2021). Green premium in the Tokyo office rent market. Sustainability, 13(21), 12227.CrossRef
Perkins, M. A., & McDonagh, J. (2012). New Zealand local government initiatives and incentives for sustainable design in commercial buildings.
Portnov, B. A., Trop, T., Svechkina, A., Ofek, S., Akron, S., & Ghermandi, A. (2018). Factors affecting homebuyers’ willingness to pay green building price premium: Evidence from a nationwide survey in Israel. Building and Environment, 137, 280–291.CrossRef
Rainwater, B., & Martin, C. (2008). Local leaders in sustainability: Green counties. American Institute of Architects.
Rajaee, M., Hoseini, S. M., & Malekmohammadi, I. (2019). Proposing a socio-psychological model for adopting green building technologies: A case study from Iran. Sustainable Cities and Society, 45, 657–668.CrossRef
Rehm, M., & Ade, R. (2013). Construction costs comparison between ‘green’and conventional office buildings. Building Research and Information, 41(2), 198–208.CrossRef
Robinson, S., Simons, R., Lee, E., & Kern, A. (2016). Demand for green buildings: Office tenants’ stated willingness-to-pay for green features. Journal of Real Estate Research, 38(3), 423–452.CrossRef
Sabapathy, A., Ragavan, S. K. V., Vijendra, M., & Nataraja, A. G. (2010). Energy efficiency benchmarks and the performance of LEED rated buildings for Information Technology facilities in Bangalore, India. Energy and Buildings, 42(11), 2206–2212.CrossRef
Sang, P., Yao, H., Zhang, L., Wang, S., Wang, Y., & Liu, J. (2020). Influencing factors of consumers’ willingness to purchase green housing: A survey from Shandong Province, China. Environment, Development and Sustainability, 22, 4267–4287.CrossRef
Schnieders, J., & Hermelink, A. (2006). CEPHEUS results: Measurements and occupants’ satisfaction provide evidence for Passive Houses being an option for sustainable building. Energy Policy, 34(2), 151–171.CrossRef
Shewmake, S., & Viscusi, W. K. (2015). Producer and consumer responses to green housing labels. Economic Inquiry, 53(1), 681–699.CrossRef
Shi, Q., Lai, X., Xie, X., & Zuo, J. (2014). Assessment of green building policies–A fuzzy impact matrix approach. Renewable and Sustainable Energy Reviews, 36, 203–211.CrossRef
Son, H., Kim, C., Chong, W. K., & Chou, J. S. (2011). Implementing sustainable development in the construction industry: Constructors’ perspectives in the US and Korea. Sustainable Development, 19(5), 337–347.CrossRef
Sun, C., Li, Z., & Li, X. (2019). Research on green building incremental cost optimization. In IOP Conference Series. Earth and environmental science (Vol. 267, No. 5). IOP Publishing.
Tapsuwan, S., Mathot, C., Walker, I., & Barnett, G. (2018). Preferences for sustainable, liveable and resilient neighbourhoods and homes: A case of Canberra, Australia. Sustainable Cities and Society, 37, 133–145.CrossRef
Vyas, G. S., & Jha, K. N. (2018). What does it cost to convert a non-rated building into a green building? Sustainable Cities and Society, 36, 107–115.CrossRef
Wan, K. S. (2018). Cost budget and cost control analysis of new green building projects. Paper presented at the 5th International Conference on Business, Economics and Management (BUSEM), Xian, PEOPLES R CHINA.
Wang, W., Tian, Z., Xi, W., Tan, Y. R., & Deng, Y. (2021). The influencing factors of China’s green building development: An analysis using RBF-WINGS method. Building and Environment, 188, 107425.CrossRef
Weerasinghe, A. S., Ramachandra, T., & Rotimi, J. O. (2021). Comparative life-cycle cost (LCC) study of green and traditional industrial buildings in Sri Lanka. Energy and Buildings, 234, 110732.CrossRef
Wu, Y. N., & Xu, R. H. (2013). Green building development in China-based on heat pump demonstration projects. Renewable Energy, 53, 211–219.CrossRef
Xie, X., Lu, Y., & Gou, Z. (2017). Green building pro-environment behaviors: Are green users also green buyers? Sustainability, 9(10), 1703.CrossRef
Yang, R., Tang, W., & Zhang, J. (2021). Technology improvement strategy for green products under competition: The role of government subsidy. European Journal of Operational Research, 289(2), 553–568.MathSciNetCrossRef
Yeganeh, A., McCoy, A. P., Reichard, G., Schenk, T., & Hankey, S. (2021). Green building and policy innovation in the US Low-Income Housing Tax Credit programme. Building Research and Information, 49(5), 543–560.CrossRef
Yudelson, J. (2010). The green building revolution. Island Press.
Zhang, X. L. (2015). Green real estate development in China: State of art and prospect agenda-A review. Renewable & Sustainable Energy Reviews, 47, 1–13.CrossRef
Zhang, L., Sun, C., Liu, H. Y., & Zheng, S. Q. (2016). The role of public information in increasing homebuyers’ willingness-to-pay for green housing: Evidence from Beijing. Ecological Economics, 129, 40–49.CrossRef
Zhang, L., Liu, H., & Wu, J. (2017). The price premium for green-labelled housing: Evidence from China. Urban Studies, 54(15), 3524–3541.CrossRef
Zhang, L., Wu, J., & Liu, H. (2018). Turning green into gold: A review on the economics of green buildings. Journal of Cleaner Production, 172, 2234–2245.CrossRef
Zhang, L., Wu, J., Liu, H. Y., & Zhang, X. L. (2020). The value of going green in the hotel industry: Evidence from Beijing. Real Estate Economics, 48(1), 174–199.CrossRef
Zhao, D., McCoy, A., & Du, J. (2016). An empirical study on the energy consumption in residential buildings after adopting green building standards. Procedia Engineering, 145, 766–773.CrossRef
Zhao, D., McCoy, A. P., Du, J., Agee, P., & Lu, Y. (2017). Interaction effects of building technology and resident behavior on energy consumption in residential buildings. Energy and Buildings, 134, 223–233.CrossRef
Zhao, D., Miotto, A. B., Syal, M., & Chen, J. (2019). Framework for Benchmarking green building movement: A case of Brazil. Sustainable Cities and Society, 48, 101545.CrossRef
Zou, Y. H., Zhao, W. X., & Zhong, R. J. (2017). The spatial distribution of green buildings in China: Regional imbalance, economic fundamentals, and policy incentives. Applied Geography, 88, 38–47.CrossRef
Zuo, J., & Zhao, Z. Y. (2014). Green building research–current status and future agenda: A review. Renewable and Sustainable Energy Reviews, 30, 271–281.CrossRef
Metadata
Title
Costs and Pricing of Green Buildings
Authors
Yongsheng Jiang
Dong Zhao
Zihao Xu
Yunjia Zhang
Zhongyi Men
Tao Hu
Copyright Year
2024
Book
Circular Economy for Buildings and Infrastructure

Print ISBN: 978-3-031-56240-2

Electronic ISBN: 978-3-031-56241-9

Copyright Year: 2024

DOI
https://doi.org/10.1007/978-3-031-56241-9_12