Reaching Net Zero: Three Essays on Energy Conservation in Commercial Real Estate

Today, the building sector is one of the largest contributors to global emissions, making it a key priority in the race towards net zero. The climate agenda is also beginning to play a major role in driving the value of commercial assets, incentivising businesses that occupy, manage and own real estate to engage in energy conservation. In three papers, this work assesses the effectiveness of a suite of voluntary and regulatory strategies in steering the market towards increased energy efficiency and lower energy demand. The first article explores the effect of the UK’s Minimum Energy Efficiency Standards (MEES) regulation on rental premiums of the London office market. The findings suggest that this policy has led to a significant decline in the rental value of office spaces directly affected by the regulation, as well as units with an energy performance certificate band closest to the compliance threshold. The second article examines the impact of energy management and productivity enhancing measures embedded in a green certification label that assesses sustainable operations and maintenance practices of existing buildings. Using data on four major US markets, the results indicate that while there are energy management features that decrease energy consumption, savings emerging from these measures are more than offset by certain indoor environment features. The third paper analyses the effectiveness of sub-metering in eradicating energy losses due to the split incentive problem by applying data on office buildings from seven US markets. The findings suggest that this feedback technology reduces inefficiencies arising from usage split incentives, while pointing to adverse energy consumption outcomes in contractual agreements where the tenant is responsible for energy payments. Nevertheless, a reduction in the variability of energy consumption and an increase in the rent premium are uncovered for this type of lease arrangement, suggesting that sub-metering may offer significant risk-reduction benefits in the eyes of the tenant.

Name dc:type.qualificationname

Doctor of Philosophy (PhD)

Level dc:type.qualificationlevel

Doctoral

Grantor dc:publisher.institution

University of Cambridge

Year dc:date.issued

2023

Author dc:creator

• Atkinson, Yana

Advisor dc:contributor.advisor

• Fuerst, Franz

• commercial real estate
• energy consumption
• policy evaluation
• real estate pricing

Licence

• https://apollo8-f-pro.lib.cam.ac.uk/bitstreams/e244756b-c544-45e9-a459-fd262a65fde8/download
• https://www.rioxx.net/licenses/all-rights-reserved/

Language dc:language

eng

DOI dc:identifier.doi

https://doi.org/10.17863/CAM.104328

OAI identifier oai:identifier

oai:www.repository.cam.ac.uk:1810/361541