environment of the Poyang Lake of the department of Education, Nanchang University, Nanchang330031, China

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1 doi: / Cot - Benefit Analyi of Green Building Baed on Input - Output Theory Liu Wei 1, 2, 3, Wu zhijiang 1 1 Eat China Jiaotong Univerity, Nanchang330013, China 2 The School of economic and management,nanchang Univerity, Nanchang330031, China 3 The Key Laboratory of the comprehenive utilization of reource ecological environment of the Poyang Lake of the department of Education, Nanchang Univerity, Nanchang330031, China Abtract Green building a an alternative to traditional building under environmental policy, i increaingly repected by the community. With regard to developer inveting in green building, how to more accurately evaluate incremental cot and incremental benefit of green building project become the key and different point during developer election of green building project becaue green building mainly embody their external benefit, while their internal financial benefit are not obviou. The paper firtly analyze benefit of green building project through financial evaluation and then analyze incremental cot and benefit of multiple project in combination with the Data Envelopment Analyi (DEA) model in order to determine efficiency of the deciionmaking unit. At lat, According to the input-output theory, the paper analyze and perfect defect of green building project in order to provide certain guidance for developer to chooe and improve green building project. Keyword: green building, incremental cot, incremental benefit 1.INTRODUCTION The rapid development of ecological civilization need of the contruction indutry change, green building i an important product. Their ignificance lie in three level including reource aving, environmental protection and ervice to people. At preent, mot contruction policy ytem about low-carbon green building in our country are mainly carried forward from top to bottom level by iuing relevant policie and green building evaluation tandard, urging each local government and relevant department to execute them and finally carrying out reult evaluation. A a whole, green building are motivated by governmental policie. In general, both generalization and policie emphaize ocial benefit generated from green building. However, a for developer, deciion about invetment in green building project cannot be eparated from conideration of economic benefit. Hence, accurate evaluation of economic benefit of green building project become the intruction premie for developer invetment. The exiting green building evaluation ytem of our country conider feaibility of green building project from the larger cope of rational reource configuration, which become a very important link in evaluation of incremental cot and incremental benefit of green building (Sun, 2015). For the green cot-benefit analyi, many cholar at home and abroad have carried out reearch. Iraeli cholar Hada etablihed the cot efficiency model baed on relation among green building cot, efficiency and general building cot and managed to verify uperiority of economic benefit of relevant green building in Irael (Hada, 2014). Jane 213

2 dicued total cot required by contruction and demolition of general building, wherein reource wate wa huge for thee building in comparion with green building. They alo analyzed reource tranfer relation between the two building type by a reource tranfer chain and concluded that economic benefit of green building were relatively ideal (Shena, 2011). Ma (2015) carried out cientific evaluation of green building project uing real option theorie in order to reflect actual value of green building and alo identified and meaured incremental cot and incremental fee of green building project by the principle of with and without analyi. Liu (2009) dicued external economy of green building, conidered benefit of green building from the long-run perpective and put forward correlative incentive policie aiming at external problem.li (2009) reearched incremental cot and incremental benefit of green building from the perpective of conumer, defined contitution and calculation method of incremental cot and incremental benefit and etablihed a contribution deciion-making model baed on conumer. According to reearch content of dometic and foreign cholar, it i difficult to accurately evaluate incremental cot and incremental benefit of green building at preent. In particular, there i no effective tandard for evaluating external economy of green building. Baed on the DEA model, the paper repectively take incremental cot and incremental benefit of green building a input and output and dicue their technical efficiency and cale efficiency in order to verify actual feaibility of green building project. 2.EXTERNAL ECONOMY AND MARKET EQUILIBRIUM OF GREEN BUILDINGS At the very beginning, the concept of externality wa an external economy phenomenon pointed out by the cholar Alfred Marhall of the neo-claical economic chool in hi work entitled Principle of Economic. Meanwhile, if an economic entity bring extraneou earning to other economic entitie, thi phenomenon can be called a external economy; if behavior of an economic entity caue loe to other economic entitie, thi phenomenon can be called a negative external economy. Green building can bring huge environmental benefit and ocial benefit, embodying the poitive externality. Neverthele, on a certain level, the macroeconomic fluctuation, information incompletene, uncertain factor and other influence brought by the externality alo lead to market failure. At thi moment, the government hall take ome meaure to regulate and control green building project.the difference between marginal private net output value and marginal ocial net output value cannot form the optimal allocation of reource merely by the market mechanim, which can be called a a Pareto Optimality phenomenon. A Pareto Optimality tate refer to that when a reource allocation tate i changed to the other tate, no party ituation would be worened, while the ituation of at leat one party would not become better. P MSR MR E 1 E 2 MC MER Q 1 * Q Q Figure 1. Market Equilibrium of Green Building Development 214

3 Fig.1 how a market equilibrium diagram of green building development, wherein it i aumed that the curve about private marginal revenue of a green building developer i MR, the cot curve i MC, and the curve about ocial benefit generated from the green building i MSR. We ve pointed out above that green building poe the poitive external economy, o that the marginal ocial revenue MSR exceed the private marginal revenue cot of green building developer, while the difference between them i deemed a MER. According to the principle of economy, the interection point Q 1 between the curve of developer marginal private revenue and the curve of marginal private cot i the equilibrium quantity of the green building; from the whole ocial level, the interection point Q * between the marginal ocial revenue curve MSR and the marginal cot curve MC i the equilibrium quantity of the green building. It i hown in the diagram that the equilibrium quantity Q 1 baed on the developer individual perpective i le than the equilibrium quantity Q * on the optimum level. 3. INCREMENTAL COST AND BENEFIT ANALYSIS OF GREEN BUILDING Green building and traditional have a ignificant difference, a a product of the contruction of ecological ociety, green building there are a lot of ecological benefit. 3.1 Incremental Cot of Green Building Definition: It mean the extra cot invetment, which i increaed for a project in comparion with a tandard building (which mainly reflect the average ocial level) in order to reach the green building tandard of a certain level. In other word, it mean the increment of a erie of cot, which i generated from the green building in order to atify requirement in the Evaluation Standard of Green Building (Cao and Dong, 2012).Sufficient reearche hall be carried out to a green building during the earliertage invetment, o that the incremental cot at the deciion-making tage of green building i mainly contituted of market urvey and conultation fee of green building cheme.the incremental cot at a preparation tage i mainly contituted of two part including deign fee for the green building and declaration authentication fee for the green building. The deign fee refer to expene which are increaed for the project in order to atify requirement in the Evaluation Standard of Green Building.At preent, our country evaluation tandard for green building related to incremental cot at the contruction tage mainly contain the following apect: land aving and outdoor environment improvement, uch a recontruction of abandoned place and roof greening; aving and recycling of energie, uch a application of more effective thermal inulation material, and rational utilization of renewable energy ource uch a olar energy and tidal energy; aving and recycling of water reource. Operation tage i an important period during the whole lifecycle of a green building. It cot the highet energy conumption during the whole lifecycle of the building, which occupie about 60%-80% of total energy conumption of the whole lifecycle. Incremental cot at thi tage mainly include expene related to wate management, intelligent ytem uch a ventilation and illumination, a well a maintenance for relevant technical equipment of the green building. Finally, the incremental cot of green building i equal to the um of the above four incremental cot. 3.2 Incremental Benefit of Green Building Definition: Incremental benefit refer to benefit brought by applying relevant technical manner uch a energy aving, water aving, high-performance material and intelligent facilitie. In general, incremental economic benefit are deemed a dominant benefit which mean the direct economic benefit brought to invetor and conumer; incremental ocial benefit and incremental environmental benefit are inviible benefit, meaning that a green building bring beneficial influence to the ociety, reident and environment beide invetor. Finally, the incremental benefit of green building 215

4 include incremental economic benefit, incremental environmental benefit, incremental ocial benefit of three, equal to the um of the three. 4. ESTABLISHMENT OF DEA MODEL Data Envelopment Analyi (DEA) i an important efficiency evaluation method put forward by famou operational reearch expert Charne and cooper et al., which i mainly ued to evaluate relative efficiency of project benefit with the ame type. Evaluation model uch a C2R and BC 2 propoed by DEA baed on linear planning can effectively analyze relative efficiency among project with multiple input and output, while the deciion making ubject from invetment to output i called a a Deciion Making Unit (DMU). We ve dicued incremental cot and incremental benefit of a green building above. Here, incremental cot and incremental benefit can be repectively taken a input and output. A green building project i our Deciion Making Unit (DMU). By etablihing the model, we can operate it and finally analyze the reult. According to the obtained reult, cot and benefit of green building project can be optimized in order to gradually make DEA effective. Specific tep of DEA method are a follow: Step 1: Determine the purpoe of evaluation. The paper reearche overall efficiency of multiple green building project after thee project invet incremental cot and generate incremental benefit, o that overall efficiency of green building project can be taken a the evaluation purpoe. Step 2: Select Deciion Making Unit (DMU).DEA method aim to evaluate relative efficiency among DMU with the ame type. We can take green building project a DMU. Here, we aume that n green building project get involved in the evaluation and refer a project, o we can obtain DMU j0, where in j=1,2,..n. Step 3: Set up input/output indicator. DEA method i applicable to analyi of multiple input and output indicator. Here, the input item refer to total incremental cot of a green building at each tage. Output item include incremental economic benefit, incremental environmental benefit and incremental ocial benefit. In addition, each deciion making unit comprie m input and output. Step 4: Select DEA model. Baed on the concept of engineering efficiency, Charne and Cooper et al. put forward a C 2 R model a the DEA model. C 2 R poee both the cale efficiency and technical efficiency when it i ued to reearch a project with multiple input item and multiple output item. A analyzed from thee two evaluation perpective, the evaluation baed on C 2 R model can atify characteritic of green building project. Step 5: Evaluation and analyi. A for weight coefficientvm and us, the efficiency evaluation indicator j 0 of the deciion making unit j i: h j 0 u k y = k= 1 m =1 ix k kj ij (1) In Formula (1): v and u can alway be elected appropriately in order to make h j0 1; the larger h j0 indicate that DMU j0 can obtain more output by le input. In order to avoid influence from an analyt ubjective will a much a poible, the weight coefficient v and u hall be et a variable and the efficiency indicator of the j 0 deciion making unit hall be taken a the objective. We can etablih a C2R model a hown in Formula 216

5 (2).Thi model i olved to obtain an efficiency evaluation index of each deciion making unit. After that, the efficiency evaluation indexe are interpreted and analyzed.the olution coure i relatively complicated, o ome convenient and imple oftware ha been developed along with deep reearche of the DEA problem. The paper applie the DEAP2.1 oftware. uy k kj0 k 1 max hj V 0 m p vx i ij0 i1 p uy k kj k 1. t. 1 j 1,..., n vx i ij k 1 uk 0 k 1,..., vi 0 i 1,..., m (2) 5. Empirical Analyi of Incremental Cot and Incremental Benefit of Green Building 5.1 Project Overview In order to analyze DEA efficiency among multiple green building project, the paper repectively urveyed three different green building project in Nanchang, Jiangxi Province. Project 1: Nanchang Mantingchun MOMA project i about 6.5 km from the urban center and located in Qinghanhu Ditrict of Nanchang, Jiangxi Province. It i a new urban area of Nanchang. The land block i extended to Science and Technology Avenue in the eat (No.2 Indutrial Road of Planning Road), extended to a traffic trail land in the outh, and extended to Education Road (Minying Avenue) in the wet and extended to Jiangfang Road (Minyuan Road) in the north. With the total contruction area of m 2, it mainly applie green building technique uch a a thermal inulation ytem, utilization of high-efficiency equipment, ue of non-traditional water ource, comprehenive greening and other green-ecological integral technique. Project 2: Nanchang Vanke Jinyu Lanwan Project i located beide GanjiangRiver and on the outh face of NanchangBridge. It i connected to Yunjin Road in the north and connected to No.1 Planning Road in the outh. It i repectively next to Jiangyun Road and Binjiang Side Road in eat and wet. It total contruction area i 76, m 2 (volume added). It baement contruction area i 11,986.48m 2. It mainly adopt green building technique uch a rational utilization of underground pace, rainwater recycling, energy-aving illumination in public area and ue of water-aving appliance. Project 3: Nanchang Vanke Runyuan project i located in the Mei Lake Scenic Spot of Nanchang. It i next to reource of Mei Lake Scenic Spot and embraced by the in-built MeiLakePark. Floor area of the project i 96,000 m 2. It total contruction area i 145,000 m 2 with the volume rate of 1.5. It mainly adopt green building technique including development and utilization of underground pace, high-efficiency lighting technique, rainwater recycling and extenive ue of water-aving appliance. We ued the financial analyi method above to calculate incremental cot and incremental benefit of each project. Calculation reult are ummarized in the following table, Firt of all, the incremental cot and incremental benefit of green building are 217

6 meaured and then analyzed baed on the input-output model. Finally, the reult obtained are lited in the table. Tabla 1 Incremental Cot Project Deciion Preparation Contruction Operation Making Stage Stage Stage Stage Total Tabla 2 Incremental Benefit Project Economic Benefit Environmental Benefit Social Benefit Etablihment and Solution of C 2 R Model Project 1, Project 2 and Project 3 were taken a deciion making unit DMU, wherein the input item included incremental cot, and output item contained three incremental benefit, namely economic benefit, environmental benefit and ocial benefit. Overall efficiencie of incremental cot and benefit of the three green building project were taken a evaluation indicator to etablih a C 2 R evaluation model. The paper applied DEAP2.1 oftware to olve the C 2 R model mentioned above, analyzed and arranged data above, then operated and olved the data in DEAP oftware and finally derived the following data from the running reult: Project 1: technical efficiency=1.00, cale efficiency=1.00. Tabla 3 Operation Reult of Project 1 Variable Original Value Radial Slack Projected Movement Movement Valued Output Output Output Input Project 2: technical efficiency=1.00, cale efficiency= Tabla 4 Operation Reult of Project 2 Variable Original Value Radial Slack Projected Movement Movement Valued Output Output Output Input

7 Project 3: technical efficiency=0.345, cale efficiency= Tabla 5 Operation Reult of Project 3 Variable Original Value Radial Slack Projected Movement Movement Valued Output Output Output Input Analyi and Solution Reult According to calculation reult obtained by above oftware, technical efficiency and cale efficiency of the three project are different. A hown in Fig.2, A, B and C are repectively correponding to Project 1, Project 2 and Project 3. Input and output indicator repectively correponding to them are alo hown in Fig.4. Efficiency of the three project i analyzed a follow: Figure 2. Technical Efficiency and Scale Efficiency Indicator of Three Project Project 1: The green building project had DEA efficiency. It alo had technical efficiency and cale efficiency. Among the three project, incremental cot and incremental benefit of thi project were optimal. Hence, it i applicable to developing and generalizing thi project and taking it a reference.project 2: Thi green building project had weak DEA efficiency. It i hown in the diagram that it technical efficiency wa 1, but cale efficiency wa not realized, indicating that it invetment were urplu. The developer can think about further optimizing the incremental cot on the premie of keeping the incremental benefit unchanged. After cot optimization, the optimality of incremental cot and incremental benefit can alo be realized.project 3: The project had no DEA efficiency. A hown in Table 6, the invetment urplu quantity of thi project wa , while it output inufficiency quantity wa , o that both the input item incremental cot and the output item incremental benefit can be improved. Developer hall be cautiou when thinking about electing thi type of green building project, hall find the root caue for optimization failure and adopt correponding meaure to improve them a much a poible in order to realize cot and benefit optimality. 6. CONCLUSION 219

8 Development of our country ha conumed too many reource. A a traditional reource conumption indutry, the building field mut eek for a more rational development manner. A a new development orientation in the building field, green building ha been increaingly valued by the public. Both the developer and uer of green building hall perit on the green building idea of aving reource, protecting the environment and creating healthy and comfortable living.from the perpective of cot and benefit of green building project, the paper introduce concept of green building economic externality, olve incremental cot and incremental benefit of green building project by financial analyi method, and accurately analyze uperioritie of green building project from the perpective of economy. At preent, non-equivalence between cot and benefit become the major problem hindering green building development in our country and greatly reduce invetment enthuiam of developer. In order to olve thi problem, the paper ue a DEA model to analyze DEA efficiency of green building project when they are taken a deciion making unit and find the optimal equilibrium point of incremental cot and incremental benefit of green building project. Baed on thi reference, the paper aim to help developer elect and improve green building project o a to increae developer invetment poitivity and effectively promote development of green building project in our country. 7. ACKNOWLEDGMENTS Funding project:jiangxi Potdoctoral Scientific Reearch Preference Funding Project (2016KY59, 2016/ /08); China Potdoctoral Science Foundation Project (2016M592113, 2016/ /05); Special Project for Economic and Social Development in Jiangxi Province (15ZT42, 2015/ /05) 8. REFERENCES Cao S., Dong C. (2012). Evaluation of whole-lifecycle incremental cot and benefit of green building. Journal of Tinghua Univerity (Nature and Science Edition), 17(6), Doi: /j.cnki.qhdxxb Hada G.I. (2014). Cot-benefit analyi of green building: An Iraeli office building cae tudy. Energy and Building, (76), Jiang F. (2014). Economic Efficiency Analyi of GreenBuilding under Whole Life Cycle Cot Concept, Contruction Economy, 35(12), Jin L, Yang X.G, Yao H. (2014). Study on the Technical and Economic Evaluation Sytem of Green Building, Contruction Economy, 27(4), Liu H.W. (2009). Analyi of economic externality of green building. Chinee and Overea Architecture, (06), Liu Q.Y. (2014). Study on Cot-Benefit Evaluation of GreenBuilding Life Cycle - Baed on Carbon Emiion, Contruction Economy, 10(1), Doi: /j.cnki x Li Y.Z, He S.J. (2009). Analyi of the Cot-riing Control in the Contruction of a Greening Building Reidential Area. Building Science, (04), Ma X.G. (2013). Evaluation of green building incremental cot efficiency baed on real option. Technoeconomic and Management Reearch, 17(05), Md. F.K., Md. M.A. (2015). Unteady Caon Fluid Flow through Parallel Plate with Hall Current, Joule Heating and Vicou Diipation, Modelling, Meaurement and Control B, 84(1), Qin X, Jing L. (2013). Rik Aement and Analyi of Green Building Life Cycle:Reearch Baed on Quetionnaire Survey, China Civil Engineering Journal, 4(8). Doi: /j.tmgcxb Sun M.S. (2015). GreenBuilding Economic Benefit in the Concept of Whole Life Cycle Cot Analyi. Urban Studie, (09),

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