Costs and Pricing of Green Buildings

Green buildings offer an effective solution to reduce carbon emissions, energy consumption, and promote sustainable development. Therefore, it is crucial to promote the growth of green buildings to achieve a circular economy in the construction industry. However, the price premium associated with green buildings, including incremental costs from developers, affects homebuyers’ willingness to pay. Thus, understanding these costs and pricing factors is essential to develop effective green building policies. This chapter provides a comprehensive review of incremental costs, price premiums, and willingness to pay for green buildings. The findings show that although incremental costs remain a challenge to green building development, the critical issue is the poor willingness to pay. Public policies should prioritize the interests of different stakeholders and motivate developers and homebuyers to actively participate in the green building movement.