Economics at your fingertips  

The price of innovation: An analysis of the marginal cost of green buildings

Andrea Chegut, Piet Eichholtz and Nils Kok

Journal of Environmental Economics and Management, 2019, vol. 98, issue C

Abstract: Energy efficiency plays an important role in reducing the carbon externality from buildings, but economic analyses of more efficient, green building have thus far ignored input costs. This paper finds that the average marginal cost of green-labeled construction projects is smaller than the value premiums documented in the literature. However, design fees, representing just a fraction of development costs but paid largely up-front, are significantly higher for green construction projects. These projects also take longer to complete. The results provide some insight into the market barriers and market failures that may explain the relatively slow adoption of otherwise economically rational green construction practices.

Keywords: Environmental innovation; Technical change; Building codes; Energy efficiency; Carbon externality; Construction costs (search for similar items in EconPapers)
JEL-codes: O31 Q55 Q56 R33 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.jeem.2019.07.003

Access Statistics for this article

Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates

More articles in Journal of Environmental Economics and Management from Elsevier
Bibliographic data for series maintained by Haili He ().

Page updated 2020-05-09
Handle: RePEc:eee:jeeman:v:98:y:2019:i:c:s0095069618304029