MIT Libraries logoDSpace@MIT

MIT
View Item 
  • DSpace@MIT Home
  • MIT Libraries
  • MIT Theses
  • Graduate Theses
  • View Item
  • DSpace@MIT Home
  • MIT Libraries
  • MIT Theses
  • Graduate Theses
  • View Item
JavaScript is disabled for your browser. Some features of this site may not work without it.

Optimal subsidy policy to promote building energy efficiency under uncertainty : the case for architectural design subsidies

Author(s)
Pan, Yue, M.C.P. Massachusetts Institute of Technology
Thumbnail
DownloadFull printable version (5.051Mb)
Other Contributors
Massachusetts Institute of Technology. Department of Urban Studies and Planning.
Advisor
David Geltner.
Terms of use
M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission. http://dspace.mit.edu/handle/1721.1/7582
Metadata
Show full item record
Abstract
The goal of this thesis is to examine the relative cost-effectiveness of subsidies in incentivizing energy efficiency investment using a real option framework. I generalize a model of a sequential investment project involving two stages, design and construction stage, and investment lags and incorporate explicit consideration of dynamic subsidies. I apply this model to green construction projects and study how design subsidies and rent subsidies incentivizes investment in green buildings. My research questions address the impact of subsidies on the trigger prices for the two stages as well as that on the instantaneous project value. Although both design and rent subsidies can reduce trigger prices and enhance project value, design subsidies cost less both in reducing the first-stage trigger to a certain threshold and in inducing firms to switch from inefficient projects to efficient ones. Lastly, I evaluate the comparative statics of investment, showing how the patterns of lags and demand uncertainty affect the effectiveness of both subsidies. A noteworthy result is that quality switching from an inefficient project to an green alternative is more likely to occur when the uncertainty is smaller or the length of the construction stage is shorter.
Description
Thesis: M.C.P., Massachusetts Institute of Technology, Department of Urban Studies and Planning, 2016.
 
Cataloged from PDF version of thesis.
 
Includes bibliographical references (pages 52-54).
 
Date issued
2016
URI
http://hdl.handle.net/1721.1/105059
Department
Massachusetts Institute of Technology. Department of Urban Studies and Planning
Publisher
Massachusetts Institute of Technology
Keywords
Urban Studies and Planning.

Collections
  • Graduate Theses

Browse

All of DSpaceCommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsThis CollectionBy Issue DateAuthorsTitlesSubjects

My Account

Login

Statistics

OA StatisticsStatistics by CountryStatistics by Department
MIT Libraries
PrivacyPermissionsAccessibilityContact us
MIT
Content created by the MIT Libraries, CC BY-NC unless otherwise noted. Notify us about copyright concerns.