The Diffusion of Green Buildings in the United States: A Spatial View

As the real estate industry is responsible for about 40% of the economy's end energy consumption, its potential to contribute to a sustainable development is accordingly high. In terms of climate change mitigation, the response of the property sector is apparent by the diffusion of green buildings. Considering green buildings as a new product in the real estate market, it is necessary to analyze its diffusion pattern in order to conclude from aggregated data to the actors' behavior behind several stages of adoption. By now, the focus of the green building diffusion literature lies more on the temporal than on the spatial dimension. However, the popular quotation 'labeled properties = prime properties', as one might assume a CSR and image driven demand of international institutional investors, has never been analyzed in detail. The question is what leads the players of the real estate industry to adopt the green innovation in their investment decisions in terms of constructing, renting or investing in certain locations. This paper provides evidence of the factors determining the spatial diffusion of green buildings in the US market by gathering real estate and macroeconomic data. Our contribution to research literature is to identify barriers for a politically intended innovation and delivers a basis for future decisions by policy-makers and investors.