Study On Incentive Scheme In Green Building Market Based On Principal Agent Theory

The construction industry is one of the main areas of global energy consumption, and releases a large amount carbon dioxide into the atmosphere. Energy crisis, global warming and other environmental issues have become increasing sever, residents' requirement towards building environmental quality, development of building energy technology and releasing of green building policies and regulations, all these factors have created conditions for the further development of China's green building market.This paper makes a comparison of green building market status and incentive policies between different countries. Based on this comparison, we proposed what we can learn from other countries. Then, we studied green building market from the perspective of economics, and demonstrated the importance and necessity of government policy incentives. In model study, this paper first studied the behaviors of participants in Green Building Market: the government, developers and consumers, the established Game Model between the government and developers on how to supervise this market. At last, we introduced consumers in this incentive model and a principal-agent model had been established based on the relationship among the government, developers and consumers, and the made some suggestions on how to design subsidy policy.The main work of this paper is that we had studied the optimal subsidy problem in Green Building Market from the perspective of policy benefit, in which the government and the end user are the principals and the developer is their agent. Based on the result we got from this model, suggestions on how to design policy to develop Green Building Market are made.