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Transaction costs (TCs) in green building (GB) incentive schemes: Gross Floor Area (GFA) Concession Scheme in Hong Kong

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  • Fan, Ke
  • Chan, Edwin H.W.
  • Qian, Queena K.

Abstract

It is claimed that transaction costs (TCs) affect the effectiveness of any green building (GB) policy. However, few studies have empirically applied TC analysis to GB incentives, which normally should have analyzed the TCs borne by different stakeholders. These include TC typology and determinants during the implementation process, especially the extra administration process where TCs possibly may be incurred. The lack of such in-depth analysis tends to make incentive-design ignore efficiency and fairness amongst the stakeholders. This study aims to improve the efficiency of GB incentives through analyzing TCs borne by the private sector stakeholders. It would identify TC typologies and determinants, and TCs measurement and allocation to different stakeholders. As TCs are policy context-specific, this paper takes a popular GB incentive scheme, Gross Floor Area (GFA) Concession Scheme, as an example. Interviews were conducted with 20 industry experts to validate TCs types and determinants, and to gauge the magnitude of TCs borne by different stakeholders. These empirical evidences are helpful for policy-makers and practitioners to better understand the impacts of TCs, so as to improve the effectiveness of future incentive schemes. In addition, GB policy recommendations for Hong Kong are proposed and many of which are relevant to other countries.

Suggested Citation

  • Fan, Ke & Chan, Edwin H.W. & Qian, Queena K., 2018. "Transaction costs (TCs) in green building (GB) incentive schemes: Gross Floor Area (GFA) Concession Scheme in Hong Kong," Energy Policy, Elsevier, vol. 119(C), pages 563-573.
    • Handle: RePEc:eee:enepol:v:119:y:2018:i:c:p:563-573
    DOI: 10.1016/j.enpol.2018.04.054
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    Citations

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    Cited by:

    1. Hongyu Long & Hongyong Liu & Xingwei Li & Longjun Chen, 2020. "An Evolutionary Game Theory Study for Construction and Demolition Waste Recycling Considering Green Development Performance under the Chinese Government’s Reward–Penalty Mechanism," IJERPH, MDPI, vol. 17(17), pages 1-21, August.
    2. Yinqi Zhang & He Wang & Weijun Gao & Fan Wang & Nan Zhou & Daniel M. Kammen & Xiaoyu Ying, 2019. "A Survey of the Status and Challenges of Green Building Development in Various Countries," Sustainability, MDPI, vol. 11(19), pages 1-29, September.
    3. Xue Xiao & Martin Skitmore & Heng Li & Bo Xia, 2019. "Mapping Knowledge in the Economic Areas of Green Building Using Scientometric Analysis," Energies, MDPI, vol. 12(15), pages 1-22, August.
    4. Lundmark, Robert, 2022. "Time-adjusted transaction costs for energy renovations for single-family house-owners," Energy Economics, Elsevier, vol. 114(C).
    5. Ke Fan & Edwin H. W. Chan & C. K. Chau, 2018. "Costs and Benefits of Implementing Green Building Economic Incentives: Case Study of a Gross Floor Area Concession Scheme in Hong Kong," Sustainability, MDPI, vol. 10(8), pages 1-19, August.
    6. Wen Jiang & Li Yuan & Lanjun Wu & Shiyue Guo, 2019. "Carbon emission reduction and profit distribution mechanism of construction supply chain with fairness concern and cap-and-trade," PLOS ONE, Public Library of Science, vol. 14(10), pages 1-23, October.
    7. Lin, Chun Liang & Chan, Edwin H.W. & Chiang, Wei-Hwa, 2022. "Urban renewal governance and manipulation of plot ratios: A comparison between Taipei, Hong Kong and, Singapore," Land Use Policy, Elsevier, vol. 119(C).
    8. Yung Yau & Huiying (Cynthia) Hou & Ka Chi Yip & Queena Kun Qian, 2021. "Transaction Cost and Agency Perspectives on Eco-Certification of Existing Buildings: A Study of Hong Kong," Energies, MDPI, vol. 14(19), pages 1-20, October.

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