Buildings consume a major proportion of the electricity power in most cities, thus promoting building energy efficiency (BEE) will directly contribute to low carbon cities. Some studies suggest that the additional investment on BEE should be well paid off by higher selling prices or more savings in term of life cycle costing. Real estate developers are profit driven and working in a competitive environment. However, it appears that real estate developers are skeptical in entering the BEE market, which requires alternate theories to explain their behaviors. In this study, we attempt incorporating transaction cost economics (TCE) and game theoretical frameworks into the analysis. It suggests that the anticipated transaction costs entailed in the provision of BEE products due to such factors as bounded rationality, opportunism and contractual hazards, combined with the asymmetrical information in the BEE market have curtailed the developers' interests. This study also leads to suggesting some policy recommendations to induce the developers entering into the BEE market by reducing the transaction costs.

@en

Buildings account for 40% of global energy consumption and nearly one-third of global CO2 emissions; and the resulting carbon footprint significantly exceeds that of all forms of transportation combined. Attractive opportunities exist to reduce buildings' energy use at lower costs and higher returns than in other sectors. This paper analyzes the concerns of uncertainty, in terms of transaction costs, to the real estate developers when they make decisions about investing in Building Energy Efficiency (BEE). To solicit views of developers regarding BEE investment, in-depth interviews were conducted with 15 executives and architects who work in big real estate development firms covering 80% of real estate activities in Hong Kong. This research applies transaction cost economics (TCE) to study the underlying reasons resulting from uncertainty that cause market reluctance to accept BEE by choice. It provides a detailed analysis of the current situation and future prospects for BEE adoption through studying the impacts from three aspects: economic, market and policy uncertainties. It delineates the market and suggests possible policy solutions to overcome the uncertainties and to attain the large-scale deployment of energy-efficient building techniques. The findings establish the groundwork for future studies on how to choose a particular policy package and what roles government should play to solve the existing problems in BEE development.@en

China's future energy consumption in the building sector will have considerable influence on both China and the world energy markets. Building activities undertaken in China will have a significant influence on the global effort to reduce the growth, and the absolute quantity of greenhouse gas emissions. Energy policy plays an important role in China's sustainable development. In the building sector, government has implemented a great many of policies to improve energy efficiency. However, in the last 3 decades, these policies are designed and adjusted with a purpose to echo the economy status and national situation in each of stage in China. With reference to the previous studies on government's roles in promoting BEE (Qian and Chan, 2007, 2010), this paper traced the Building Energy Efficiency (BEE) policies back since 1980s and review the development of the policies^ the transitional China into four stages: Kick-off & demo stage 1980-1994, warming up stage 1995-2001, immediate action stage 2002-2005, and comprehensive promotion stage 2006-till now. The authors provide a broad overview of government involvements relating to energy efficiency issues in the built environment in China. This paper, firstly, introduces the five government's roles in promoting BEE and its market development; secondly, the authors review the key national BEE policies related to the built environment in the past three decades and demonstrate the government's environmental concern and efforts. Discussion on the implementation of the BEE policies and ways to be improved has been carried out. It thus provides a critical overall review and assessment of the policies and programs to understand BEE issues that will contribute to China's energy and economic future.@en