Building quality, building green: Conventions theory and industry transformation

Conventions theory was developed in part to explain how heterogeneous actors with asymmetrical information manage to carry out economic transactions. In particular, how do these actors work together to reduce uncertainty about the quality of the commodities involved? While most applications of conventions theory have been in the agro-food industry, this paper looks at the newly developing green building industry as an example of economic production that relies on multiple constructions of quality in its production and consumption processes. Previous work has shown that conflicts over quality often arise when the parties involved are operating under different conventions, a danger with the multiple actors that must cooperate to produce (and consume) a green building. Furthermore, in the case of green buildings, uncertainty about a product's performance does not end at the point of transaction; the quality of many of the materials or processes involved can only be proven over time. I argue that the producers of green buildings and green building materials have overcome the problems of a) uncertainty over time and b) conflicts over the meaning of quality by drawing on all four conventions simultaneously. Furthermore, this simultaneous incorporation of trust, third-party standards, price, and the common good, as enacted through the Leadership in Energy and Environmental Design (LEED) standards of the U.S. Green Building Council (USGBC), is one of the main reasons for the phenomenal growth of the green building industry among public, private, and non-profit clients.