LEED Adopters: Public Procurement and Private Certification

This paper empirically explores the interaction between local government procurement rules and private-sector adoption of green building practices. More specifically, it examines the diffusion of the US Green Building Council's LEED standard for sustainable building practices, and ask whether private-sector real estate developers are more likely to seek LEED certification in cities with a municipal green building policy that applies only to new public buildings (i.e., a green procurement policy). The authors find that private sector LEED adoption is roughly 80 percent greater in municipalities with a green-building policy than in a matched control sample of cities of similar size and demographic characteristics. Further analysis reveals that there is more LEED adoption among “neighbour cities” that border a city that adopts a green building policy, compared to these neighbouring cities' own set of matched controls. As a general conclusion, this paper provides evidence that public procurement policies can influence private sector purchasing decisions in a way that reinforces underlying policy goals. Given the relative scale of public and private purchasing, this may be a necessary condition for public procurement guidelines to have substantive impacts (e.g., on the scale of regulatory policy).