Smart Instrument Mixes to Promote Green Building

By Shen, Yayun; Faure, Michael | Duke Environmental Law & Policy Forum, Fall 2018 | Go to article overview

Smart Instrument Mixes to Promote Green Building


Shen, Yayun, Faure, Michael, Duke Environmental Law & Policy Forum


I. INTRODUCTION

Buildings can pose far-reaching environmental impacts, (1) some of which may be mitigated by setting standards to make the buildings green. Green buildings (GBs) are those built in line with environmentally protective standards. (2) The number of GBs is growing worldwide, (3) and the GB movement owes its survival to the efforts of various parties, including individuals, governments, and self-regulatory agencies (SRA). Yet it is too soon to say that the GB movement has reached its zenith, due to the challenges facing GB compliance. There are four main challenges for the development of GB: the higher initial cost, the lack of incentives, the unawareness of building stakeholders, and the dispersion of stakeholders. (4) Those challenges can boil down to a matter of incentives and preferences shaped by an institutional framework, which consists of rules and players possessing (imperfect) information about GB. This article argues that the law, as part of the institutional framework, precisely guides the institutions and instruments that can play a role to create incentives and steer preferences of stakeholders towards GB.

If the law matters in GB compliance, then one might consider how the law may promote GB compliance. Scholars from various theoretical perspectives have argued that a variety of instruments can be used in environmental governance to deal with externalities and other market failures. (5) Given the fact that none of the instruments in isolation is able to provide an optimal level of environmental protection, increasingly mixes of instruments are advanced as the ideal policy tool. (6) As GB compliance promotes environmental protection, it is likely that instruments for environmental compliance also work for GB compliance. In practice, the U.S. government has contributed to GB compliance through law and policy, using different instruments to engage different stakeholders. (7) In this way, the GB movement in the United States not only survives but also thrives. (8)

The joint use of instruments is also what one can observe in practice. Then, the question can be asked why the joint use makes sense in theory. To advocate for the joint use of instruments for GB promotion, this article proceeds as follows: after this introduction, this article briefly explains what it means to build green and what specific challenges are faced by green building (Part II). Next, this article describes why, in theory, a mix of instruments might be better suited than the use of one particular framework, from a law and economic perspective (Part III). The types of instruments at work for environmental compliance are classified into command-and-control, market-based, and suasive instruments, most of which are run by governments, individuals, or professional associations. However, none of those instruments can be free from imperfect information, high costs, private interests or the inaccuracy of measurement. Where government failure, liability failure, and the failure of self-regulation may occur, a joint effort is thus needed. Then this article considers the instruments at work for GB compliance to examine which instruments have been put in place and whether this constitutes a joint use (Part IV). This article separately reviews some of the empirical evidence concerning the effectiveness of the specific instruments (Part V). Part VI concludes.

II. GREEN BUILDING AND ITS CHALLENGES

A. Key Elements of Green Building

GB compliance in its early times relied largely on technical industry-made standards used to certify a building as green. The commonly used GB rating systems, especially the Leadership on Energy and Environmental Design (LEED), (9) the Building Research Establishment Environmental Assessment Method (BREEAM) (10) and the Green Globe, (11) identify the five principal elements of GB: energy efficiency, land use, indoor air quality (IAQ), water use, and construction/demolition (C/D) waste management. …

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