54 P. JIANG ET AL.
- Three-star green building subsidies are inadequate.
- Developers are less aware of the benefits (e.g., profits from energy
and water savings, staff productiveness improvements) of green
buildings at the operation stage, and insufficient information is avail-
able for raising developer awareness.
To overcome the current barriers to green building development in
China, national and local subsidy schemes must be made sound and fea-
sible. The first solution may involve improving the subsidy scheme for
three-star green buildings. Based on the analysis presented above, national
subsidies and the subsidies offered in Shanghai and Jiangsu are clearly
inadequate for three-star green buildings. The central government (i.e.,
the Ministry of Finance and the Ministry of Housing and Urban–Rural
Development) and local governments must update subsidy procedures
and substantially enhance subsidy levels to eliminate barriers related to the
incremental costs of three-star green buildings. Simultaneously, the process
of approving and identifying two- and three-star green labels at the opera-
tion stage must be simplified, and costs must be reduced. Furthermore,
more information and training must be provided by the government for
building developers to raise their awareness of green building benefits
(e.g., economic, environmental, and health benefits).
In addition to these means of improving subsidy schemes, other eco-
nomic incentive policies such as the energy performance contracts (EPCs),
carbon trading mechanisms, and carbon taxes described below may also
be considered.
3.4.2 Energy Performance ContractBecause developers must invest more in green buildings than in traditional
buildings, the main challenge facing developers involves incremental costs.
Although economic incentive policies and subsidy schemes in particular have
been developed to promote the development of green buildings in China,
barriers remain nonetheless. In addition to insufficient subsidies for three-star
green buildings, other problems include the following: (1) technological risks
involving the utilization of new equipment and technologies for energy saving
in buildings and (2) financial risks involving investments in new technologies
and equipment. However, we also note that investments (i.e., incremental
costs) in green buildings can be paid back by reducing energy water usage
costs and in the management of certain phases of the green building life cycle.