Are ‘green’ certificates effective in encouraging more environmentally friendly buildings?
January 31, 2018
In this monthly “Ask NUS Economist” series, Dr Eric Fesselmeyer (Senior Lecturer, NUS Department of Economics) discusses the effectiveness of Singapore’s Green Mark Award initiative in incentivizing property developers to be more environmentally friendly. The certificate is given to properties that are deemed to have achieved a sufficient level of environmental friendliness, and is meant to act as an indicator for buyers of the environmental impact of the property.
From his recently published research, Dr Fesselmeyer finds that for properties given the Green Mark Award, prices can increase by up to 4.1 percent. This reflects the efficacy of the policy, given that property developers are therefore more motivated to achieve green certification in their projects. Dr Fesselmeyer points out that the award makes less salient features such as better energy management more obvious for buyers and identifies this as one of the main reasons for the initiative’s effectiveness. The research findings thus suggest that certification is an important policy tool to help mitigate the environmental impact of residential buildings.
Read Dr Fesselmeyer’s editorial here.