Tim Simcoe Publishes New Study on Gov’t Stimulus of Green Building

in Emerging Research, News, Strategy & Innovation
December 14th, 2012

HBS Working Knowledge Article Spotlights “Public Procurement and the Private Supply of Green Buildings”

Timothy Simcoe and Michael W. Toffel have published a new study on how government policies can stimulate private demand for environmentally friendly buildings. Simcoe is an assistant professor in the Strategy and Innovation Department at Boston University School of Management. Toffel is an associate professor in the Technology and Operations Management group at Harvard Business School.

Their study, “Public Procurement and the Private Supply of Green Buildings” has been published by the National Bureau of Economic Research (NBER Working Paper Number 18385) and was recently spotlighted in the article “LEED-ing by Example,” from HBS Working Knowledge:

In the debate over whether to increase or decrease the stringency of environmental regulations, the possibility that government agencies might use purchasing to stimulate market demand for “green” products and services is often overlooked. Nevertheless, several recent US presidents (of both parties) have issued executive orders requiring federal agencies to use environmentally preferable products and services whenever possible…

But….there has been virtually no industry analysis of whether this strategy actually worked, up until now.

In a new paper, “Public Procurement and the Private Supply of Green Buildings,” authors Timothy Simcoe and Michael W. Toffel show that there is, indeed, a spillover effect to the private sector. The authors studied what happened after municipal governments in California adopted policies that required public (but not private) building renovations and new construction to build “green,” which nearly always meant adhering to the US Green Building Council’s Leadership in Energy and Environmental Design (LEED) standard. After local governments decided to pursue LEED certification for their own buildings, there was an uptick in the number of local architects, general contractors, and other construction industry professionals who sought LEED accreditation. Also, the use of the LEED standard increased among private builders in the same local markets.

Read more at Working Knowledge‘s LEED-ing by Example.

See a recent overview of this research on Forbes.com

Above: Photo of the first LEED-certified parking structure in the US by flickr user Schlüsselbein2007.