This chapter develops a theory to explain how demonstration projects can help facilitate transformation in the marketplace. This theory is based primarily on a single economic concept: The costs of acquiring and utilizing new information. Understanding the role that pilot and demonstration projects can play in disseminating information is crucial to understanding the prospects for market transformation. These information flows occur both on the supply side and demand side of the (building) technologies market. This chapter details how information flows across supply networks and throughout markets can eventually shift standard operating practices, though these results are hardly guaranteed. We speculate that geographic networks and communities of practice are largely responsible for leveraging information spillovers, lowering costs, and facilitating dissemination of innovative technologies.

This chapter introduces a theory of Green Market Transformation, where emergent energy and environmental technologies gain widespread adoption in the marketplace. It articulatea a number of mechanisms that reduce transaction costs and disseminate information across the marketplace, such as building supply chains and improving demand for nascent technologies. Further, it reviews the global, European, and US uptake of ecolabeled buildings, providing evidence of the impact of the Green Building Movement. By providing examples of prominent ecolabeled buildings, it explores the motivations for ecolabel adoption and argues that firms and organizations compete to build ever-greener buildings. This competitive dynamic is evident across sports stadiums, where the authors detail a series of incremental improvements to stadiums over time.

This chapter defines green buildings as a holistic concept and as promoted by the Green Building Movement. It reviewa the theory and empirical evidence of market failures and various barriers that have shaped the Green Building Movement, which aims to improve environmental footprints in a way that is profitable to participants. It draws upon the market for lemons and signaling theory to explain the role of ecolabeled buildings in overcoming information barriers. To the scholar, this mission seeks to align public and private benefits through reduction of information asymmetries and externalities of building practices. It then characterizes the scope of green building policy initiatives across the United States and across the globe. It also shows the prevalence of the Green Building Movement around the globe.