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Government green procurement spillovers: Evidence from municipal building policies in California

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  • Simcoe, Timothy
  • Toffel, Michael W.

Abstract

We study how government green procurement policies influence private-sector demand for similar products. Specifically, we measure the impact of municipal policies requiring governments to construct green buildings on private-sector adoption of the US Green Building Council׳s Leadership in Energy and Environmental Design (LEED) standard. Using matching methods, panel data, and instrumental variables, we find that government procurement rules produce spillover effects that stimulate both private-sector adoption of the LEED standard and investments in green building expertise by local suppliers. These findings suggest that government procurement policies can accelerate the diffusion of new environmental standards that require coordinated complementary investments by various types of private adopter.

Suggested Citation

  • Simcoe, Timothy & Toffel, Michael W., 2014. "Government green procurement spillovers: Evidence from municipal building policies in California," Journal of Environmental Economics and Management, Elsevier, vol. 68(3), pages 411-434.
    • Handle: RePEc:eee:jeeman:v:68:y:2014:i:3:p:411-434
    DOI: 10.1016/j.jeem.2014.09.001
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    More about this item

    Keywords

    Public procurement; Green building; Quality certification; Environmental policy;
    All these keywords.

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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