A Cost-Benefit Analysis of Public Incentives of Private Enterprise Investment in Sustainable Urban Development

EPA Grant Number: F6C40889
Title: A Cost-Benefit Analysis of Public Incentives of Private Enterprise Investment in Sustainable Urban Development
Investigators: Kaiser, Charlotte
Institution: Yale University
EPA Project Officer: Lee, Sonja
Project Period: September 1, 2006 through September 1, 2007
Project Amount: $74,172
RFA: STAR Graduate Fellowships (2006) RFA Text |  Recipients Lists
Research Category: Academic Fellowships , Fellowship - Urban Planning , Pollution Prevention/Sustainable Development , Environmental Justice


Sustainable urban development is the provision of a public good (environmental sustainability) by the private sector (banks, private equity investors, and real estate developers). Public investment is needed to induce private actors to provide this public good. Using empirical studies, I will seek to identify the most cost-effective way to grow private sector investment in sustainable urban development. I will examine two types of sustainable development: infill redevelopment, and LEED-certified green building. I will compare the effectiveness in different American cities of such methods as public investment, tax credits, regulations, and public-private partnerships.

To identify effective and appropriate tools for the public sector to effectively stimulate private investment in sustainable urban development.


I will use both hypothetical and empirical analysis in my research. In my hypothetical analysis, I will conduct a pro-forma analysis comparing each of the two pairs of sustainable/unsustainable approaches to analyze the financial differences between each as seen from the investor/developer perspective. This will illuminate one source of under-investment in sustainable development—i.e., a perceived cost-ineffectiveness on the part of private investors. This analysis will also reveal the key points where market interventions are needed to drive private investment, and the size such interventions will need to be.
In my empirical analysis, I will examine public sector investment in sustainable urban development in major cities in the United States—including, but not necessarily limited to, New York, Chicago, and Portland, OR. I will evaluate the costs and benefits of the approaches taken by these cities.

Finally, as a means of “ground-truthing” the results of my pro-forma analysis, I will conduct case study interviews with infill developers and green building developers, as well as their non-sustainable counterparts, to identify key barriers to entry into sustainable development techniques.

Expected Results:

Through my analysis I expect to identify both the key obstacles to increased private investment in sustainable urban development, and the most effective public tools for surmounting those obstacles. By comparing such tools as green building tax credits, public-private partnerships, zoning amendments, and others, I will be able to determine how municipalities can most effectively encourage private actors to invest in sustainable urban growth.

Supplemental Keywords:

sustainable urban development, green buildings, zoning, urban infill, public-private partnerships,, RFA, Scientific Discipline, Sustainable Industry/Business, Sustainable Environment, Technology for Sustainable Environment, Economics and Business, Ecology and Ecosystems, sustainable development, environmental sustainability, green building design, community based, public private partnerships, sustainable urban environment, environmental cost analysis

Progress and Final Reports:

  • Final