Transaction Costs (TCs) in Building Regulations and Control for Green Buildings: Case Study of Hong Kong

Ke Fan, Queena Qian, EHW Chan

    Research output: Chapter in Book/Conference proceedings/Edited volumeConference contributionScientificpeer-review

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    About 40% of global energy consumption and nearly one-third of global CO2 emissions are on account of buildings. In Hong Kong, buildings consume up to 90% of electricity during construction and operation, where all the design and construction of private developments is subject to control under the Buildings
    Ordinance. The way building regulations are applied and the arrangement of supporting systems can affect the effectiveness of building energy consumptions and the corresponding costs induced. Among all the incentives and regulatory instruments, Gross Floor Area (GFA) concession becomes a popular scheme to promote green building (GB), which grant bonus GFA to the developers who comply with the Sustainable Building Design Guidelines (SBDGs) and achieving at least the minimum level of BEAM Plus certification. Transaction costs (TCs) have been debated over the past decades that affect the effectiveness of the policy implementation. This study applies the lens of transaction costs theory to explore the TCs inventories of implementing GFA concession practice in Hong Kong. This paper aims to analyze how the GFA Concession Scheme induces TCs among various stakeholders in practice, and how in turn it affects the effectiveness of building control for GB. Interviews are conducted to identify the TCs determinants regarding the GFA Concession Scheme. Examples are provided from the real practice to illustrate the nature of TCs. Policy implications to reduce TCs are proposed accordingly.
    Original languageEnglish
    Title of host publicationProceedings of the CIB World Building Congress 2016
    Subtitle of host publicationVolume I - Creating built environments of new opportunities
    EditorsKalle Kähkönen, Marko Keinänen
    PublisherTampere University of Technology
    Number of pages11
    ISBN (Print)978-952-15-3741-7
    Publication statusPublished - 2016
    EventCIB World Building Congress 2016 - Tampere, Finland
    Duration: 30 May 20163 Jun 2016

    Publication series

    NameTampere University of Technology. Department of Civil Engineering. Construction Management and Economics. Report


    ConferenceCIB World Building Congress 2016
    Abbreviated titleWBC16


    • Transaction costs (TCs)
    • building regulations and control
    • Hong Kong
    • Gross Floor Area (GFA)
    • concession scheme
    • green building (GB)


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