Green Building Incentive Approach: The Developer Perspective

Green building has become a major measure for undermining the negative impact of construction industry on global environment and climate change. Government has announced series financial incentives including tax and construction fee discount to promote the adoption of green building. However, the contractor as a critical role in the process of going green has not been rewarded for the extra effort required. This study proposed an effective incentive mechanism for the contractor through game theory approach. The optimal incentive intensity and the optimal green level are obtained. Results show that incentive mechanism can successfully lower total cost for the developer and increases the profit for the contractor. Moreover, it facilitates the sustainable development on construction industry by increasing the green building level to higher ground.