The diffusion over time and space of energy efficiency in building

Awareness of global warming and the extent of greenhouse gas emissions have focused more attention upon energy efficiency in building. Moreover, the inventory of “green” office space in the United States has increased dramatically since the introduction of rating schemes that attest to the energy efficiency or sustainability of commercial buildings. In some metropolitan areas, the supply of certified office buildings has more than doubled in the last decade, and there are a few metropolitan areas where “green” office space now accounts for more than a quarter of the total office stock. In this paper, we analyze the diffusion of buildings certified for energy efficiency across US property markets. Using a panel of 48 metropolitan areas observed over the last fifteen years, we trace the diffusion of green building practices across the country. We then model the geographic patterns and dynamics of building certification, relating industry composition, changes in economic conditions, characteristics of the local Financial support for this research was provided by the Royal Institute of Chartered Surveyors, the European Center for Corporate Engagement, and the University of California Energy Institute. We are grateful to William Wheaton and also to Jon Southard of CBRE Econometric Advisors for facilitating access to some of the data used in this analysis. A much condensed version of this paper appears in the Papers and Proceedings of the American Economic Association, 2011(2), 77–82. The present work appears with permission from the American Economic Association. N. Kok Department of Finance, School of Business and Economics, Maastricht University, 6200 MD Maastricht, The Netherlands e-mail: [email protected] M. McGraw · J. M. Quigley (B) Department of Economics, University of California-Berkeley, 549 Evans Hall, Berkeley, CA 94720-3880, USA e-mail: [email protected] M. McGraw e-mail: [email protected] 123 Author's personal copy