Do Pilot and Demonstration Projects Work? Evidence from a Green Building Program

Abstract

Pilot and demonstration (P&D) projects are commonly deployed to catalyze early adoption of technology but are poorly understood in terms of mechanism and impact. We conceptually distinguish unique functions of pilots and demonstrations, then examine whether they accelerate adoption in the case of green building technology. To identify effects on adoption, we develop a difference-indifference in differences strategy, exploiting variation in timing, location, and technologies of green building P&Ds. Results indicate local quarterly green building adoption rates double following completion of a P&D project. Further analyses examine mechanisms driving this effect. The results suggest green building demonstration projects create learning externalities, proliferating technology diffusion in local markets and through building owner networks. Together, these results suggest that investments in P&D projects by public and private actors can lower costs for subsequent adoption.

In the LEED: Racing to the Top in Environmental Self‐Regulation

“…These findings inform our understanding of the dynamic outcomes of voluntary, environmental, and self‐regulatory programs more broadly. The finding that symbolic certification became less likely as LEED diffused affirms that early adopters drive market transformation by revealing benefits to substantive adoption of new environmental technology (Blackburn et al, 2020; Jiang et al, 2020; Maxwell et al, 2000). Further, we note that the USGBC actively cultivates a network of associated professionals through trainings and online platforms that showcase advances from the United States and around the world.…”

“…Moreover, there are practical returns to adoption and verification of environmental quality at LEED scores between the tiers (Eichholtz, Kok, & Quigley, 2013). As experience reveals the benefits of adopting new green building technologies, adopting those technologies becomes more attractive (Blackburn, Flowers, Moreno-Cruz, & Matisoff, 2020) in addition to the differentiation rewards to certification. If this learning stokes a RTT, we expect increased adoption at higher LEED scores, with less emphasis on meeting the requirements of specific certification tiers.…”

Challenges and enabling features of small and medium infrastructure public–private partnerships (P3s): a case study of the US P3 infrastructure market

“…Indirect financial and non-monetary compensation look beyond the direct revenue generated by the project, such as toll fee. Some examples are socioeconomic benefits, such as the application of new technologies, the creation of new government revenue source, the creation of new jobs and the innovation of local governance (Peter, 2012;Blackburn et al, 2020). Transaction cost could be classified into ex ante transaction cost and ex-post transaction cost by the time of occurrence.…”

The role of demonstration projects as policy instruments in the development of nonprofit organizations: Beyond instrumentality

“…Demonstration projects have been widely used by the public and private sectors in a variety of areas, such as energy, technology, employment, and health care (Blackburn, et al., 2020; Kelly & Rocco, 2019; Lefevre, 1984; Thompson, 2008). A demonstration project is a means of demonstrating the feasibility and reliability of new practices to a broad set of actors to create information spillovers and facilitate broader implementation (Baer, et al., 1976; Bollinger, 2015).…”

“…In public administration and policy, prior research treats demonstration projects as technical devices; thus, much of this work has focused on the effectiveness of demonstration projects (e.g., Blackburn, et al., 2020; Thompson, 2008). Much of this research uses a single case study design to trace the process of how a demonstration project emerges, scales up, and scales out to a region (e.g., Hughes et al., 2020; Kelly & Rocco, 2019).…”