Transaction Cost and Agency Perspectives on Eco-Certification of Existing Buildings: A Study of Hong Kong

Yung Yau, Huiying (Cynthia) Hou, Ka Chi Yip and Queena Kun Qian
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Yung Yau: Department of Sociology and Social Policy, Institute of Policy Studies, Lingnan University, Hong Kong 999077, China
Huiying (Cynthia) Hou: Department of Building Environment and Energy Engineering, The Hong Kong Polytechnic University, Hong Kong 999077, China
Ka Chi Yip: Institute of Policy Studies, Lingnan University, Hong Kong 999077, China
Queena Kun Qian: Faculty of Architecture and the Built Environment, Delft University of Technology, 2628 BL Delft, The Netherlands

Energies, 2021, vol. 14, issue 19, 1-20

Abstract: Eco-certification schemes are usually launched with various incentives provided by local governments to facilitate green building development and building energy retrofits. A number of barriers to building energy retrofitting have been identified in previous literature, while the barriers to the eco-certification of existing buildings are under-researched. Drawing on a set of building data retrievable from the BEAM Society and other sources, we carried out an analysis and found the building energy retrofitting, as well as the certification process, were unwelcomed in multi-owned residential buildings. The identified shortfall is put forward from the perspectives of transaction cost theory and agency theory. The findings reveal that high transaction costs incurred during negotiations and coordination among a large number of co-owners within a typical apartment building can outweigh the benefits of retrofitting and eco-certification. Besides, the remuneration structure of third-party property management agents discourages agents from facilitating co-owners to initiate retrofitting. This study provides significant implications for policymakers to understand the concerns of building owners and managers over the decisions and the processes of both the building energy retrofits and eco-certification. The problems and barriers unveiled in this study will facilitate the refining of current energy efficiency policies and related incentives designs.

Keywords: building energy performance; building energy retrofits; green building certification; transaction costs; agency theory; incentives (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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