ANALYSIS OF ECONOMIC INCENTIVE POLICIES... 47The quantitative method is designed to quantify the incremental cost
of green buildings and to also compare the relationship between subsidies
and incremental costs. Green building incremental costs per unit of floor
area can be determined from the initial cost and floor areas of the sample
buildings. The equation used is:
Ci=Co/S (3.1)
Where Ci is incremental cost (yuan/m^2 ), Co is the initial cost (yuan),
and S is the floor area (m^2 ).
The total green building subsidy for the two case studies (i.e., Suzhou
and Shanghai) is calculated using the following equation:
St=+Sc SL (3.2)
Where St is the total subsidy (yuan), Sc is the central government sub-
sidy (yuan), and SL is the local government subsidy (yuan).
For Suzhou, the local subsidy is the sum of subsidies from the Jiangshu
provincial government and Suzhou municipal government. For Shanghai,
the local subsidy is equal to the municipal government subsidy. To fur-
ther identify differences between two- and three-star green buildings, the
quantitative analysis also examines reasons behind differences in the quan-
tity of design- and operation-stage green buildings within the sample.
3.3 results
3.3.1 Current Chinese Central Government Economic PoliciesGreen buildings have had the following positive external impacts:
decreased energy consumption and water use, lower pollution outputs,
and improved indoor and outdoor environmental health over the life cycle
period. However, green building developers cannot ensure all the external
benefits—and particularly monetary benefits—leading to economic exter-
nality issues for developers. As the market can only reflect a producer’s
internal revenues and costs, developers are not guaranteed profits from
external green building benefits, which is also considered a form of market
failure in the promotion of green building development.