How Green Turns into Gold? Optimizing the Dual Effect of ‘Price Premium for Green’ and ‘Cost Premium for Green’ of HK-BEAM Plus Certified Housing
DescriptionGreen building is widely believed to be an optimal solution to excessive energy consumption andhuge amounts of greenhouse gas emissions by building related activities. Although governments havemade a great effort to promote the development of green buildings, their diffusion has been too slow todate. Such slow progress in green building development is primarily caused by the reluctance of privatesectors to translate the green building philosophy into practice. As with the long-standing and contentiousdebate on ecology and economy, the private sectors are of the view that the additional costs and risksinvolved in green practice will erode their financial performance. Lack of concrete evidence on how“green” can turn into “gold” has reduced the enthusiasm of developers in adoption of green design andtechnologies, and thus hindered the diffusion of green buildings.Based on data concerning HK-BEAM Plus certified residential buildings, this research investigatesthe price premium and cost premium associated with the various categories of green building, so as toassist developers in deciding how to choose the most cost-effective green design methods andtechnologies. To model the green price premium, a sample of at least 136 green residential buildings willbe obtained from the Hong Kong Green Building Council (HKGBC) and Hong Kong BEAM Societylimited records in comparison with a similar size sample of closely geographically related similarconventional (non-green) residential buildings. The transaction information of this combined sample willbe extracted from the Economic Property Research Center (EPRC) database, and the data relating to theirstructure, location and neighborhood characteristics calculated by a Geographic Information System(GIS), will be used to evaluate the cost-benefits of each of the HK-BEAM Plus rating system’s sixcategories of Site Aspects, Materials Aspects, Energy Use, Water Use, Indoor Environmental Quality, andInnovations and Additions. For the green cost premiums, estimates will be derived from HKGBC,construction cost consulting companies’ cost databases, together with validation workshops andinterviews with senior professionals from HKGBC, BEAM Society Limited and the industry. These priceand cost premiums for green feature price and cost premiums will then be incorporated into an optimizingprocedure to help real estate developers in identifying the potentially most cost-effective features toincorporate into their development decisions. Finally, a specification for a computerized version of theoptimization process will be developed for ease of use by developers on an internet platform/phone App.The result of the work is expected to be more developers being stimulated to invest in green buildingsand thus greatly boost green building practice in private sectors. It will also provide the government withmeans of more accurately designing subsidy programs for the green design methods and technologies soas to meet its sustainable development goals.?
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- Green housing , Price Premium , Cost Premium , ,