Sustainable construction: Some economic challenges

Sustainable construction faces economic challenges at different levels. On the macroeconomic level, the goals of sustainable construction are being implemented most actively in industrial countries in which the share of construction output is decreasing. However in both less developed and newly industrialized countries, the share of construction output is increasing, but the goals of sustainable construction are more difficult to implement. On the mesoeconomic level, the construction sector depends on the implementation of the goals of sustainable development across the national economy as a whole. Supply chains feeding the construction sector are long and intertwined, making it difficult to assess the effect of different materials, components and procedures. On the microeconomic level, buildings are created with shorter time horizons in response to being a demand-derived commodity and increasingly dominated by mechanical, electrical and electronic equipment. Their finance is being adjusted to the short and medium term which is in conflict with sustainable construction, whose goals rely upon the long term. Two broad approaches for meeting the economic challenges of sustainable construction are considered: governance through standards, legal and regulatory practices; market-oriented policies which influence the costs of particular forms of construction. Both approaches have a role, but it is argued that the market-oriented measures will be more effective at the strategic level.