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Why go green? Cities' adoption of local renewable energy policies and urban sustainability certifications

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Why go green? Cities' adoption of local renewable energy policies and urban sustainability certifications

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WHY GO GREEN? CITIES’ ADOPTION OF LOCAL RENEWABLE ENERGY
POLICIES AND URBAN SUSTAINABILITY CERTIFICATIONS

Jenneille Hwai-Yuan Hsu

A dissertation submitted to faculty of the USC Graduate School, University of Southern California,
in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Public Policy
and Management.

December 2017

Approved by:
Dr. Dan A. Mazmanian
Dr. Adam Rose
Dr. Shui-Yan Tang

2

TABLE OF CONTENTS
ABSTRACT .................................................................................................................................... 4
PREFACE ....................................................................................................................................... 7
CHAPTER 1 WHAT FUELS LOCAL RENEWABLE AND SOLAR ENERGY GOAL-
SETTING? MULTILEVEL GOVERNANCE AND MUNICIPAL CAPCITY ........................... 10
Abstract ................................................................................................................................. 10
Introduction ............................................................................................................................11
Renewable energy goals at the state and local levels in the United States ........................... 14
Theoretical frameworks ........................................................................................................ 18
Data and method ................................................................................................................... 31
Results ................................................................................................................................... 35
Discussion and conclusion .................................................................................................... 38
Appendices ............................................................................................................................ 42
References ............................................................................................................................. 49
CHAPTER 2 PREDICTORS FOR ADOPTION OF LOCAL SOLAR APPROV AL
PROCESSES AND IMPACT ON RESIDENTIAL SOLAR INSTALLATIONS
IN CALIFORNIA CITIES ............................................................................................................ 57
Abstract ................................................................................................................................. 57
Introduction ........................................................................................................................... 57
Local solar approval processes ............................................................................................. 62
Literature ............................................................................................................................... 65
Data and method ................................................................................................................... 72
Results ................................................................................................................................... 74
Discussion and conclusion .................................................................................................... 77
Appendices ............................................................................................................................ 80
References ............................................................................................................................. 84
CHAPTER 3 EXAMINING THE ADOPTION AND EFFECTS OF VOLUNTARY
ENVIRONMENTAL PROGRAMS: EVIDENCE FROM U.S. CITIES ..................................... 89
Abstract ................................................................................................................................. 89
Introduction ........................................................................................................................... 90
City sustainability certifications or rating programs ............................................................. 93
Motivations for the adoption of voluntary environmental programs .................................... 97
Effects of participation in voluntary environmental programs ........................................... 102
Methods............................................................................................................................... 105
Results ................................................................................................................................. 106
Conclusion ...........................................................................................................................117
3

Appendices .......................................................................................................................... 121
References ........................................................................................................................... 125

4

ABSTRACT
Cities are the home of inhabit more than half of the world’s population and account for two-
thirds of the world’s energy. As great emitters of various pollutants, cities serve a crucial role in
developing renewable energy and reducing greenhouse gas emissions. Numerous studies have
examined the determinants of the adoption on urban sustainability initiatives. In contrast, the
literature around local renewable energy policy adoption is limited. Also, while extant literature
on renewable energy policies mostly investigates the role of federal and state governments,
scholarly work pays less attention to their local counterparts. Topics around another emerging
policy instrument to facilitate local sustainability—city sustainability certifications or rating
programs—attract even less research interest from scholars and remain unexplored. This three-
essay dissertation contributes empirical insights broadly on the sustainability policy adoption
literature and helps policy scholars and practitioners understand the motivations of local
governments in the United States to adopt renewable energy goals, solar approval processes, and
sustainability certifications or rating programs.
Drawing hypotheses from and contributing to the multilevel governance framework and
municipal capacity literature, the first essay tests the impacts of Type I hierarchal governance
(state-level renewable energy goals) and Type II horizontal governance (regional collaboration
on renewable energy planning and membership in transnational climate networks) on local
renewable energy goal-setting. By testing a dataset containing more than 570 cities, towns, and
counties across the 48 states with multilevel mixed effects logistic regressions, the results
indicate that state-level renewable energy goals and participation in regional coordination on
renewable energy planning are positively correlated with local renewable energy goal-setting.
The results also demonstrate that local governments’ fiscal and technical capacity and ownership
5

of a municipal utility make the adoption of local renewable or solar energy goals more likely.
However, the form of local government, a high share of pro-environmental voters, and
homeownership do not appear to influence the local provision of renewable and solar energy.
Focusing on cities in California, the second essay examines the determinants for local solar
approval processes, as well as the impact of solar approval process on small-scaled residential
solar photovoltaic (PV) installations. By improving solar reviewing processes, local governments
play a facilitating role in reducing the soft costs for onsite solar PV systems, and they encourage
the deployment of solar energy technologies at the local level. Utilizing the data collected from
California’s annual statewide planning surveys, the results show that cities with large population
size, ownership of a municipal utility, high degree of residents’ environmental ideology, high
education level of residents, and lower density are more likely to adopt solar approval processes.
More importantly, this analysis provides empirical evidence that the presence of a local solar
approval process increases the total size (in kW) and quantity of small-scaled residential solar
PV installations in a city. The result highlights the important role of local governments and
policies in promoting the deployment of solar PV at the local level.
The third essay examines cities’ impetuses, decision-making processes, and the effect of
participating in sustainability certifications or rating programs. In response to the multifaceted
challenges of urban climate governance, some cities decide to join voluntary environmental
programs (VEPs) as one means to address climate change and promote local sustainability. Prior
studies around VEPs mostly have firm or facility as the unit of analysis and investigate the
motivations and the effectiveness of business firms’ participation into VEPs, while VEPs in the
public sector are rarely studied. By reviewing and documenting the firsthand experiences of five
U.S. cities in joining two sustainability certifications or rating programs, this study examines
whether cities are driven by the three widely believed factors that motivate organizations’ VEP
6

participation in the literature: public recognition, external pressures, and the value of knowledge
transferred from VEPs. By conducting semi-structured interviews with staff in city, regional and
federal agencies, nonprofit organizations, and other voluntary programs, the analysis shows that
cities’ participation in sustainability certifications or rating programs is similarly driven by these
three motivations suggested in the VEP literature. The results indicate strong evidence that cities’
participation in sustainability certifications or rating programs are, as previous literature
suggests, largely motivated by public recognition. City governments are also found to value the
knowledge transferred from the VEPs highly, although the findings also reveal the existence of
alternative knowledge-gathering mechanisms from which cities can obtain information regarding
local sustainability planning. The analysis also supports the hypothesis that cities’ participation in
sustainability certifications or rating programs is sometimes driven by external stress, such as
regulatory pressures and peer competition. While there is no evidence indicating participation in
VEPs improves citywide environmental performance, city governments report gaining internal
benefits, including capacity building and increased morale, from the participation process. This
research highlights the non-environmental benefits of VEPs that potentially strengthen city
governments’ capacity and institutions for addressing complex sustainability issues at the local
level.

7

PREFACE
Cities have always fascinated me since I was a kid. Growing up in a populous Asian city
and later moving to the United States for graduate school, I have been living in big cities my
entire life. My interest gradually evolved from observing different urban landscapes and
residents’ lifestyles while traveling around the world, to uncovering, through systematic research,
how institutions and urban characteristics influence local policymaking in protecting climate and
preserving the environment. I am intrigued by and passionate about the exploration of how urban
climate governance affects people’s daily lives.
By writing this dissertation, I have gladly learned that many cities in the United States are
visionaries and pioneers in promoting renewable energy and sustainable development. More
importantly, I have identified some factors that explain why some city governments adopt and
implement renewable energy and sustainability initiatives. As the first dissertation chapter
demonstrates, leadership from state governments and collaboration with neighboring
municipalities both encourage local governments to increase local renewable energy capacity.
The control over a municipal utility also makes city governments more likely to promote
alternative energy in their jurisdictions. Citizens’ political preferences for cleaner environments,
as the second chapter shows, can also motivate local governments to improve renewable energy
programs—for example, simplifying application review procedures for residential solar
installations. By doing so, governments can increase the total size (in kW) and quantity of solar
installations in a city. Furthermore, adopting climate-friendly measures also grants cities public
recognition, especially when they are awarded by sustainability certifications. It may be costly
and time-consuming to adopt and implement sustainability initiatives, but city staff in return
acquire knowledge and pride in sustainability planning, as the third chapter suggests. Writing this
8

dissertation encourages me to believe that cities can certainly make a difference by initiating
innovative sustainability policies and setting high bars beyond states’ requirements for climate
change mitigation and adaption. I hope my dissertation will serve as worthy reading for
individuals who are interested in environmental policy, renewable energy, and sustainable cities.
This research would not have been possible without support and contributions from many
individuals. I am most grateful to my advisor and dissertation committee chair, Professor Shui
Yan Tang, for his magnanimous support, constructive feedback, and generous kindness
throughout my PhD study. I appreciate his consistent guidance and high standards, leading me to
the end of this journey. I have no doubt that his positive influence will continue to follow me in
the many coming years. Also, I would like to thank my dissertation committee members for their
wealth of knowledge and helpful insight. Professor Adam Rose has guided me on several
research projects regarding economics of energy, natural resources, and environmental policy.
His rich research experience has cultivated me to become a better scholar. I thank Professor Dan
Mazmanian for always inspiring me by sharing his wise words and encouraging advice on
academic development and research directions.
I appreciate the funds and research opportunities provided by several institutions that made
my doctoral study possible, including USC Price School of Public Policy, Center for Sustainable
Cities, East Asian Studies Center, Taiwan’s Environmental Protection Administration, U.S.
Environmental Protection Agency, and Woodrow Wilson Center.
I am additionally grateful to the many individuals that have helped me hone my research
abilities and teaching skills over the course of my graduate studies at the USC Price School and
the UCLA Luskin School. I thank Hilda Blanco, Peter Robertson, Lisa Schweitzer, Peter Gordon,
Jennifer Miller, Rui Wang, Wen-Ling Tu, Jennifer Turner, Elaine Sanchez Wilson, and several
journal editors and anonymous reviewers for their generous advice. I also thank my colleagues
9

and friends who generously share their academic and life advice and provide lovely companion
and encouragement whenever I need support. I would like to give particular recognition to
Danielle Williams, Hui Li, Yusun Cho, Arthur Acolin, Zoe Tsai, and î-Kun Kueh.
I owe my deepest gratitude to my family. My parents, Jih-Yih Hsu and Jin-Li Su, who
inspired me to pursue my doctoral degree by being successful professors and influential mentors
themselves. I am also grateful to my brother Robert Hsu, who has provided emotional support
and joyful companionship in my life.
Last, but certainly not least, I am extremely fortunate and grateful to have my life partner
and dearest friend, An-Lei Huang, for always being sweet, determined, generous, and
unconditionally supportive not only for my doctoral study but also every single day in the life we
built together. Thank you.

Jenneille Hwai-Yuan Hsu

Oakland, California, June 15, 2017

10

CHAPTER 1
WHAT FUELS LOCAL RENEWABLE AND SOLAR ENERGY GOAL-
SETTING? MULTILEVEL GOVERNANCE AND MUNICIPAL CAPCITY

Abstract
Through the lens of multilevel governance theory, this study examines the state- and local-
level determinants for the adoption of local renewable and solar energy goals in the United
States. Analyzing more than 570 local governments with multilevel logistic regression models,
the results indicate that state-level renewable energy goals and participation in regional
coordination on renewable energy planning are positively correlated to local renewable energy
goal-setting. The results also demonstrate that local governments’ fiscal and technical capacity
and ownership of a municipal utility make the adoption of local renewable or solar energy goals
more likely. However, form of local government, a high share of pro-environmental voters, and
homeownership do not appear to influence the local provision of renewable and solar energy.

Keywords: Multilevel governance, renewable energy goals, local government

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Introduction
Renewable energy has environmental and social benefits compared with its conventional
electricity source counterparts. Governments at different levels have recognized the importance
of renewable energy and passed policies and programs to facilitate its development around the
world. For example, in March 2015, U.S. President Barack Obama signed a new federal
sustainability plan that aims to reduce national greenhouse gas (GHG) emissions by 40% by
2025 while boosting clean energy (Moniz, McCarthy, and Roth 2015). Later, the Clean Power
Plan was announced in August with the goal of reducing national carbon emissions from power
plants 32% below the 2005 level by 2020 (The White House 2015).
Urban environments accommodate more than 50% of the global population (Kennedy et al.
2009) and consume approximately two-thirds of the world’s energy (Keirstead and Schulz 2010).
Local governments have gradually become the dynamic drivers of policy and technical
innovation toward low-carbon energy systems and actors of combating climate change in the
context of global environmental governance (Homsy and Warner 2015; Jänicke 2014; and Sharp,
Daley, and Lynch 2011). The local level is ultimately where renewable energy technologies are
installed and where climate change has an impact on residents and the environment. Possessing
local knowledge, governments can adopt renewable energy goals and implement renewable
energy programs that correspond to local conditions, shape residents’ energy choices, and help
achieve national climate and energy goals. In addition, local governments may better understand
the discourse on clean energy and issue-framing to residents as well as gather useful information
about the best practices of renewable energy projects based on local needs (Aznar et al. 2015;
and Peterson 1995). However, unlike renewable energy policies at the national and state levels
that are commonly utilized, only a small fraction of local governments has adopted renewable
energy goals and policies to facilitate renewable energy resources and usage within jurisdictions
12

(IEA 2009). Understanding the determinants of local renewable energy planning and policy
adoption will be valuable to policymakers and practitioners to spur renewable energy
development at the local level.
While most research around renewable energy policy has a focus on national or state level,
little has explored the issues around local renewable energy policies. Among the studies focusing
on local renewable energy development, most rely on case studies and qualitative analyses
(Bomberg and McEwen 2012; Gustavsson, Elander, and Lundmark 2009; Keirstead and Schulz
2010; Mattes, Huber, and Koehrsen 2015; Smith 2007; and Walker and Devine-Wright 2008).
Not until recent years did researchers start to utilize quantitative methods on various renewable
energy policies and issues (Bollinger and Gillingham 2012; Carley 2009; Carley 2011; Fischlein
and Smith 2013; Kwan 2012; and Yi and Feiock 2012).
Among U.S. state-level renewable energy policies that have been studied, renewable
portfolio standards (RPS) have received the most scholarly attention and were found effectively
to increase renewable energy generation in states (Carley 2009). However, the impact of RPS on
local renewable energy policymaking has not yet been systematically explored. Through a
multilevel governance approach, this article examines the impact of RPS and solar set-asides as
well as local factors that influence the adoption of local renewable and solar energy goals in the
United States. To the author’s knowledge, only about a handful of case studies have analyzed the
influence of central, regional, and local institutions on local clean energy governance in cities in
Europe (Emelianoff 2014; Gustavsson, Elander, and Lundmark 2009; and Smith 2007), Canada
(Berkhout and Westerhoff 2013), and the United States (Pitt 2010).
In contrast, local climate policy adoption has been quantitatively examined by scholars
through the theoretical lens of multilevel governance in the United States (Homsy and Warner
2015; and Krause 2011). Employing multilevel regression models, Krause (2011) found that
13

municipal characteristics, rather than state climate policies or characteristics, are the dominant
drivers for local voluntary climate commitment. Demonstrating opposite evidence, Homsy and
Warner (2015) found that a state-level climate governance framework and local characteristics
both encourage local climate and energy policy adoption. The mixed results of state-level climate
policy impacts on local climate and energy actions suggest more quantitative research is needed
to investigate the influences of state- and city-level factors on local climate and energy
policymaking.
Theoretically, in a Type I multilevel governance framework where higher-level authorities
govern lower-level agencies, federal or state governments can motivate, support, or mandate
local governments to adopt climate change initiatives and renewable energy policies.
Simultaneously, local governments are policy innovators and share their knowledge about
climate and energy planning to governments at higher tiers. In a Type II multilevel governance
system dominated by networks of public and private actors across levels, local governments
interact—including competition, cooperation, lesson learning, and sharing of best practices—
with each other and other types of social organizations on targeted tasks such as renewable
energy development. Previous research examines the effect of Type I institutions on local climate
policymaking without analyzing the effect of Type II arrangements (Homsy and Warner 2015;
and Krause 2011). This article offers a complete explanation of local renewable and solar energy
goal-setting through the lens of both Type I and Type II multilevel governance. Additionally, this
research examines the specific forms of municipal capacity contributing to local renewable
energy goal-setting. Due to the high cost associated with renewable energy technologies and the
multifaceted knowledge related to renewable energy planning, local governments’ fiscal and
technical resources, as well as the additional capacity contributed by municipal utilities, are
important support for community-wide renewable energy goal-setting.
14

This study utilizes survey data containing more than 570 municipalities across 48 states in
the United States to analyze whether state- and local-level factors together influence the adoption
of local renewable and solar energy goals. The results suggest that both state leadership in
renewable energy (Type I) and engaging in regional coordination on renewable energy initiatives
(Type II) encourage local renewable and solar energy goal-setting; regional coordination with
neighboring municipalities appears to have a stronger influence than state policies in motivating
local governments to establish renewable and solar energy goals. Among the different types of
municipal capacity, technical capacity is particularly a strong predictor to increase the likelihood
of the adoption of local renewable and solar energy goals. Fiscal resources are found positively
associated with local solar energy goal adoption. Owning a municipal utility also increases the
likelihood for local governments to establish community-wide renewable energy goals.
In the essay that follows, the first section will provide an overview of renewable energy
goals in the United States at the state and local levels. The author will then explain the theoretical
frameworks and propose corresponding hypotheses. After introducing data sources and methods,
the results of the analysis will be presented. The final section will offer discussion and
conclusion.

Renewable energy goals at the state and local levels in the United States
State governments are responsible for building necessary infrastructure to support regional
electricity markets and clean energy development, cultivating clean energy businesses, and
protecting consumers by regulating information disclosures and product assurance of renewable
energy technologies (CESA 2015). State-level policies, mainly renewable portfolio standards
(RPS), have been the primary policy instruments to facilitate new renewable energy generation
in the United States. As a widely used demand-pull renewable energy policy, RPS requires that a
15

certain percentage of electricity supplied to customers in a state must come from renewable
sources. Across states, RPS policies set up similar goals to facilitate in-state renewable energy
development, but in practice their provisions and implementation vary widely (Fischlein and
Smith 2013). Along with an increase in renewable energy capacity, RPS policies produce co-
benefits including GHG emissions reduction and air quality improvement (Yi and Feiock 2012),
as well as economic benefits including green job creation and energy supply diversity (Fischlein
and Smith 2013; and Yi and Feiock 2012).
By 2014, 29 states and the District of Columbia had established RPS policies. Among these
states, 19 states and the District of Columbia have solar or distributed generation set-asides or
credit multipliers to promote solar energy among all renewables (see Figure 1). Solar set-asides
mandate a particular portion of renewable energy generated from solar in a state and create a
separate market for solar renewable energy certificates (SRECs) from renewable energy
certificates (RECs). A REC or SREC is a tradable credit for each megawatt-hour (MWh)
generated and sold separately from the electricity (Gaul and Carley 2012).
Solar power has not experienced rapid growth in the United States until recent years.
1
In
the last two decades, wind power has become the more prevalent renewable because of the
economies of scale enjoyed by centralized windfarms. Out of the additional renewable capacity
in states with RPS policies between 1998 and 2009, 94% was wind, 3% biomass, 1.4%
geothermal, and only 1.5% solar (Wiser, Barbose, and Holt 2011). Wind power has a low average
cost, making it difficult for distributed solar energy systems to compete. By differentiating
SRECs from RECs, state governments separate solar energy from other low-cost renewables in
different markets and create a favorable policy environment to rooftop solar energy systems.

1
Over the past eight years, as solar hardware costs continue to fall, the installed solar power capacity has drastically
grown about 22 times, from 1.2 GW in 2008 to an estimated 27.4 GW at the end of 2015 (DOE 2016).
16

Figure 1 Number of states with RPS policies

Data source: Barbose (2014)

Studies found that the adoption of RPS policies, as well as the number of years of RPS
implementation, have a positive and significant effect on in-state new renewable generation
(Carley 2009; and Yin and Powers 2010). Researchers have compared the adoption of RPS
among states (Huang et al. 2007) and investigated the relationship of RPS design and the
corresponding policy outcomes (Carley 2009; Fischlein and Smith 2013; and Yin and Powers
2010). Studies with a focus on state-level solar-targeted policies investigate solar set-asides, state
financial incentives, personal tax credit, and net metering standards (Burns and Kang 2012; Gaul
and Carley 2012; Krasko and Doris 2013; Sarzynski, Larrieu, and Shrimali 2012; Steward and
Doris 2014; and Wiser, Barbose, and Holt 2011). Findings suggest that state solar-related
policies, especially solar set-asides attached to RPS, have a significant effect on installed solar
capacity (Steward and Doris 2014; and Wiser, Barbose, and Holt 2011).
IA
MN☼
AZ☼
MA☼
ME
NV☼
CT
PA☼
WI
NJ☼
TX☼
NM☼
CA
CO☼
HI
MD☼
NY☼
RI
DC☼
DE☼
MT
WA☼
IL☼
NC☼
NH☼
OR☼
MI☼
MO☼
OH☼
KS
0
5
10
15
20
25
30
35
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Number of states with RPS policies and solar set-asides
☼: States adopted solar, DG set-asides,
or credit multipliers
17

Compared with states, localities appear to be late movers in clean energy development.
Under federal and state guidelines, local governments can adopt renewable energy goals and
strategies to meet their energy objectives through land use regulations, financial incentives,
financing mechanisms, standardized permit application procedures, and other policy instruments.
Local governments are required to comply and can voluntarily outperform state regulations in
renewable energy standards and goals.
Local renewable and solar energy goals are not exclusive. Depending on local conditions
and energy needs, some municipalities establish community-wide solar energy goals to promote
onsite solar systems or distributed generation among all renewables. Particularly, renewable
energy goals usually specify a certain percentage of electricity coming from renewables by a
specific period. Some U.S. cities have set up aggressive goals of 100% renewable energy
provision; for example, San Diego, California (by 2035), Burlington, Vermont (by 2050), and
Georgetown, Texas (by 2017). Renewable or solar energy goals can also specify in numbers of
capacity. For example, San Antonio set goals of 1,500 MW of renewable capacity with at least
100 MW of solar by 2020. Recently, New York City expanded its solar energy goals to 1
gigawatt by 2030 and 100 MWh for storage by 2020.
Prior to stimulating the use of renewable energy, ideally, local governments conduct
thorough assessments of available energy resources, current energy supply and consumption, the
need to meet future energy growth, and the cost to set up renewable energy goals and design
renewable energy programs (IEA 2009). Compared to policy adoption, goal-setting tends to
require comprehensive planning across sectors as well as deep understanding of renewable
energy technologies and community-wide renewable energy landscape. Additionally, goal
setting can be deemed as an attempt of hierarchical control over local renewable energy
generation and embody political leaders’ commitment to increase renewable and solar energy
18

generation (Smith 2007).
This paper adds to the literature around RPS and solar set-asides as well as local energy
policy, looking at the impact of state-level renewable energy polices on local renewable and
solar energy goal-setting. While studies around state-level energy policies are ample, research
with a specific focus on local renewable energy policymaking is lacking. Here, the author
provides empirical insights into local renewable energy policy and implications that could spur
local renewable energy development. Additionally, this study contributes to the multilevel
governance literature by quantitatively examining the impacts of Type I and Type II
arrangements on local renewable energy goal-setting in the United States.
Theoretical frameworks
Since Betsill and Bulkeley (2005) drew attention to the need to step beyond the local frame
to understand the complex interplay among policy actors across different levels in urban
sustainability governance, groups of scholars have applied the multilevel governance framework
to analyze local climate and energy actions in different contexts (Gustavsson, Elander, and
Lundmark 2009; Homsy and Warner 2015; Pitt 2010; and Smith 2007). Theoretically, there are
two types of multilevel governance; both intend to reduce the transaction cost of coordination
among authorities in public good provision (Hooghe and Marks 2003). Type I is territorially
based, general purpose, durable with hierarchical structure, and offers less flexibility. This
governance approach reduces the transaction cost by internalizing most relevant externalities and
limiting the number of jurisdictional levels. Minimizing transaction cost in a fundamentally
different way from Type I, Type II multilevel governance is function-based and aggregates the
public good provision into task-specific, intersecting jurisdictions. With high flexibility, the
forms of Type II multilevel governance vary in sizes and issues. Particularly, Type I emphasizes
19

“a hierarchical approach which focuses on the ways in which competences and authority are
shared between different levels of government,'' while Type II represents “a polycentric model in
which multiple overlapping and interconnected horizontal spheres of authority are involved in
governing particular issues” (Betsill and Bulkeley 2005, p. 48).
In nature, renewable energy is a problem-focused governance issue that crosses
administrative boundaries and multiple scales, requiring commitment and involvement of
different levels of policy actors (Smith 2007). It is important to understand the complex
dynamics among different actors and their microlevel incentives for successful renewable energy
development in a multilayer structure (Ostrom 2012). Multilevel governance is a fitting
framework to analyze renewable energy issues because it allows decision-makers to alter the
scale of governance for different purposes and addresses the decentralization of policy—from the
centralized forms to decentralized actions at lower levels (Homsy and Warner 2015; and Smith
2007).
Type I multilevel governance
Type I multilevel governance suggests that leadership of the higher levels and top-down
vertical policy intervention can strengthen the impact of local pioneers and induce horizontal
knowledge-sharing at the lower levels of governments (Jänicke 2014; and Smith 2007).
Simultaneously, knowledge and policy innovation flow up from local governments to high levels
in the hierarchal framework. This implies that state governments’ leadership toward renewable
energy development is influential in renewable energy policy adoption at the local level. In the
American federal system, municipalities have limited authority to govern local environmental
issues under the states’ legal frameworks. State governments design and provide physical and
social infrastructure that is necessary for broad territorial economic development (Peterson
1995). Building and maintaining the power infrastructure falls on state governments’
20

responsibility, and local governments do not have power to govern its local use of the electricity
grid. Potentially, state governments could reduce local costs of developing renewable energy by
providing advanced power infrastructure, necessary renewable energy regulations, and financial
and informational support to lower governments. For example, while local renewable energy
requirements can be inconsistent across municipalities that confuse installers and builders,
wasting time and resources (Busche 2010), states can help local governments design
standardized renewable energy programs and create a consistent renewable energy market that
reduces installers’ and localities’ transaction cost to deploy clean energy technologies. By
establishing statewide renewable energy goals and standards, state governments also signal
municipalities that renewable energy is a priority on the state agenda.
Evidence shows that leadership of state-level environmental policies can encourage local
environmental policy adoption. Homsy and Warner (2015) found evidence that states’ climate
action plans and RPS have a positive impact on the number of adopted municipal sustainability
policies. Similarly, Feiock and West (1993) found that state-level recycling efforts increases the
likelihood of their subordinate municipalities to provide recycling services. In their interviews,
Berkhout and Westerhoff (2013) documented that leading Canadian cities of climate protection
credit their local accelerating energy transition to strong provincial leadership. Therefore, the
author hypothesizes the following:
H1-A: States’ renewable energy goals are positively associated with the adoption of local
renewable energy goals.
H1-B: States’ solar energy goals are positively associated with the adoption of local solar
energy goals.

Type II multilevel governance
21

Spontaneously, Type I multilevel governance is facilitated and reinforced by the activities
and diverse ties of policy actors in Type II multilevel governance (Betsill and Bulkeley 2007).
Providing flexible structures and function-based networks of local governments, Type II
governance is complementary to Type I governance for public good provision. Through
networking across scales with other jurisdictions and organizations, alternative policy options
may be generated for solving the public goods problems of renewable energy development at the
local level (Smith 2007). For example, Type I collaboration between state and local governments
on climate protection and energy planning can be lacking and insufficient for effective local
climate and energy governance. Scholars observed that in recent years, U.S. state and local
governments have become increasingly aware of the policy interdependencies among cross-level
jurisdictions on climate change governance (Betsill and Rabe 2009). In a report on the status of
U.S. local clean energy policies, about half the cities that were interviewed reported no or limited
interaction with state governments even when state-level clean energy policies were in place,
while all interviewed cities reported interaction with other local governments on clean energy
issues (Busche 2010). Similar circumstances were documented by a study evaluating local
energy systems in British Columbia, Canada (Berkhout and Westerhoff 2013). Many
interviewees felt coordination and dialogues were lacking both between and within provincial
and local governments.
Transnational networks of local governments provide platforms where members exchange
knowledge and stimulate policy learning of climate and energy planning (Betsill and Bulkeley
2006; Gustavsson, Elander, and Lundmark 2009; and Lee and van de Meene 2012). Contrary to
hierarchical governmental structures, transnational climate change networks encourage
horizontal policy-learning among worldwide city members as well as cities’ international
interdependence and bring the global context into cities’ energy decision-making (Lee 2013).
22

Many local governments tend to follow leading peers and replicate their innovative renewable
energy strategies (IEA 2009). Experience sharing among cities fosters the diffusion of effective
local renewable energy policies and strategies.
A growing number of transnational networks have emerged, aiming to advance climate and
energy governance at the local level. Well-known global climate change networks include the
International Council for Local Government Initiatives (ICLEI) and the C40 Climate Leadership
Group, both committed to local climate protection and governance. Specifically, since 1990,
ICLEI has been providing technical information and assistance to city members, and has offered
a platform for members to communicate and exchange experiences on GHG reduction strategies
and community sustainable development. ICLEI has a membership of more than 450 cities,
towns, and counties in the United States and over 1,100 members worldwide (SunShot 2015). In
addition, ICLEI USA is a partner of the U.S. Department of Energy’s SunShot Solar Outreach
Partnership, targeting all U.S. local governments to help them design policy instruments for solar
energy development. SunShot provides various workshops to train city staff on topics around
renewable energy governance and foster collaboration among local policymakers and
stakeholders. Previous studies find ICLEI membership is positively associated with local
sustainability practices (Hawkins et al. 2016; and Wang 2013).
City members vary in the level of engagement and the ability to access available
information and recourses provided by ICLEI (Betsill and Bulkeley 2006). Additionally, in a
recent study, scholars demonstrate the disconnection between ICLEI membership and local
climate protection activities (Yi, Krause, and Feiock 2017). The authors argue that
municipalities’ decisions to join ICLEI might be driven by the subsequent reputation of entering
the club, rather than actually pursuing the advancement of local climate protection. Nevertheless,
ICLEI serves as a network for U.S. municipalities to acquire resources, tools, and knowledge of
23

renewable energy planning. Participation in ICLEI demonstrates a city’s commitment to
collaborate with various public and private members on climate protection and energy planning.

H2-A: ICLEI membership is positively associated with the adoption of local renewable
energy goals.
H2-B: ICLEI membership is positively associated with the adoption of local solar energy
goals.

Alternatively, interlocal collaboration occurs at the regional level when multiple local
governments coordinate or cooperate on targeted tasks through formal or informal networks
(Hammer et al. 2011; and Lee, Feiock, and Lee 2011). Within the regional collaboration
networks, local governments compete, cooperate, and share information on the issues of clean
energy planning and climate protection practices (Lee, Feiock, and Lee 2011). Such mechanisms
minimize transaction costs for coordination among participants, reduce information problems,
and generate consensus on regional renewable energy development (Feiock 2013). Through
interaction with other governments, local governments cultivate an adaptive capacity for solving
regional policy problems by learning from and sharing experiences with other city innovators. In
addition, these interactions facilitate trust among participants and reduce the risks of free-riding
in regional renewable energy governance.
In regional collaboration networks, local governments tend to discuss, advise, and share
information on renewable energy issues with localities in close geographic proximity (Lee,
Feiock, and Lee 2011). Communication and coordination with nearby cities may particularly
raise city governments’ awareness and public pressure of renewable energy planning (Krause
2011). Especially, the successful climate-friendly policy adopted by nearby cities can be
24

particularly influential to a local government and stimulates its adoption of similar policies (Pitt
2010). Many studies document that local authorities around the world coordinate with
neighboring municipalities on energy planning (Berkhout and Westerhoff 2013; Busche 2010;
IEA 2009; and Pitt 2010). It is found that a city engaged in regional collaboration on energy and
climate planning adopts more numbers of climate mitigation policies (Pitt 2010) and is more
likely to devote budgetary and staff resources to local sustainability (Hawkins et al. 2016).

H3-A: Engaging in regional coordination on renewable energy initiatives is positively
associated with the adoption of local renewable energy goals.
H3-B: Engaging in regional coordination on renewable energy initiatives is positively
associated with the adoption of local solar energy goals.

Municipal capacity
In a multilevel governance framework, local capacity and condition are important factors
influencing which policy measures were adopted (Bulkeley and Betsill 2005; and Smith 2007).
By broad definition, capacity is “the ability of organizations to carry out their missions and
achieve their aims” (Wang et al. 2012). Depending on the nature of tasks and policies, specific
forms of capacity that are required to achieve desired policy outcomes usually comprise multiple
dimensions that can be independently measured (Hall 2008). For example, among the various
forms of local capacity, a city’s fiscal and technical planning capacity have proven to be
important contributors to the adoption of local environmental programs (Feiock and West 1993;
Homsy and Warner 2015; Krause 2011; Wang 2012; and Wang et al. 2012).
Fiscal capacity is a critical element for the success of local climate protection initiatives.
Local governments report that lack of funding and financial resources impede the adoption of
25

climate and energy policies (COPR 2012). Empirically, a high amount of local revenue is found
to increase a city’s likelihood of committing to voluntary GHG reduction (Krause 2011), the
adoption of municipal recycling programs (Feiock and West 1993), and the number of climate
and energy policies (Homsy and Warner 2015). The role of municipal fiscal resources can be
particularly important to local renewable energy policymaking due to the high costs associated
with renewable energy technologies. Although financial incentives are usually distributed by
federal and state governments to investors, some cities offer rebates or financing schemes to their
residents to encourage renewable energy installation.
Notably, the required municipal capacity for adopting policy goals can be different from
those required in daily operation (Hall 2008). In other words, a government that carries out day-
to-day functions efficiently may not taking on new responsibilities easily (Terman and Feiock
2015). Moreover, performing specific governance tasks requires for an agency to possess the
necessary expertise (Bertelli 2012). Community-wide renewable energy goal-setting may require
thorough assessment of available energy sources, prediction of future energy supply and demand,
and estimation of the cost to increase renewable energy provisions. In the case of facilitating
local renewable energy installation, the U.S. Department of Energy recommends for local
governments to create a special task force and designate a coordinator to accelerate the transition
to clean energy (DOE 2011). Institutionalizing local initiatives bolsters their sustainability and
demonstrates a commitment toward clean energy development.
Therefore, technical staffing can be considered a form of municipal capacity to adopt local
renewable energy goals (Terman and Feiock 2015). Given that renewable energy is a
multifaceted issue requiring comprehensive planning and understanding of technologies, it is
important for cities to designate staff who possess specialized knowledge. Previous studies find
that the employment of sustainability staff in local governments increases the number of
26

environmental initiatives that are adopted (Homsy and Warner 2015). Additionally, before setting
up renewable energy goals, it takes analytical capability to collect sufficient information and data
to engage evidence-based policymaking and plan out medium- and long-term projections
(Howlett 2009). Salient data collection is fundamental to establish baselines, create goals, and
measure progress. However, cities report difficulties in choosing the best data and methodology
to track policy progress overtime due to insufficient staff capacity (Aznar et al. 2015).
The presence of publicly owned utilities also enhances municipalities’ fiscal and technical
capacity in climate and energy policymaking (Homsy 2016). Municipal utilities generate excess
revenue through the generation and distribution of electricity and provide access to federal or
state energy-specific grants for local governments. In Homsy’s (2016) research revealing the role
of municipal utility in enabling local energy programs, these additional fiscal resources
contributed to local governments are reported to subsidize privately owned solar systems, install
solar panels on public buildings, and fund energy-related educational programs. On the other
hand, the presence of a municipal utility increases a community’s technical capacity in two ways.
First, the utility staff possesses knowledge about energy equipment to support city efforts to curb
conventional energy consumption. Second, municipal utilities have access to technical training
and resources provided by statewide public power associations or other organizations.
Equally important, unlike investor-owned utilities that are mainly revenue-driven, municipal
utilities are usually more responsive to residents’ needs and likely to lose revenue in exchange of
reducing conventional energy consumption for local environmental benefits. Because municipal
utilities are governed by local government officials instead of state public utility agencies, a
municipal utility provides more independence and political feasibility to local governments to
innovate programs that reduce energy consumption from conventional power sources (Ostrom
2012). In other words, local governments that own municipal utilities are more capable to carry
27

out their renewable energy goals and missions.
Taken all together, a locality’s fiscal resources, technical capacity, and ownership of a
municipal utility contribute to the level of municipal capacity related to local renewable energy
goal-setting.

H4-A: Municipal capacity is positively associated with the adoption of local renewable
energy goals.
H4-B: Municipal capacity is positively associated with the adoption of local solar energy
goals.

Form of local government and constituent preference
Form of local government is another key factor that influences municipal performance and
environmental policy adoption (Homsy and Warner 2015; and Sharp, Daley, and Lynch 2011).
The most common municipal forms in the United States are mayor-council and council-manager
structures, suggesting fundamental differences in local leaders’ motivations and incentives in
policymaking and implementation (Terman and Feiock 2015). Mayors in the mayor-council
governance structure are politically accountable to voters and are usually given higher
administrative and budgetary authority, while appointed city or county managers in the council-
manager structure tend to concern more the efficiency of governmental operation and less on
constituent satisfaction (Bae and Feiock 2013).
Local governments are sensitive to political pressures to design and implement programs
and policies that meet the needs of local businesses and residents (Peterson 1995; and Tiebout
1956). Because mayors in the mayor-council form are extremely politically accountable to
constituents, theoretically they would be more likely to support environmental regulations—
28

compared to city managers in the council-manager form—when the majority of the local
electorate supports environmental protection and renewable energy technologies (Sharp, Daley,
and Lynch 2011). For example, Bae and Feiock (2013) found evidence that mayor-council
governments adopt more community-wide energy and climate initiatives in alignment of
constituent preferences than council-manager governments.
Intuitively, support from citizens is essential for local renewable energy development,
especially when the spread of renewable energy technologies are aligned with households’ and
businesses’ financial interests (IEA 2009) and their environmental ideologies (Gromet,
Kunreuther, and Larrick 2013). Individuals who have “greener” ideologies value environmental
protection and are more likely to undertake costly measures for emission reduction (Kahn 2007).
Commonly, an individual’s environmental ideology is associated with a political affiliation
(Krause 2011; Millard-Ball 2012; and Wang 2013). In general, Democratic and Green Party
members are viewed as more liberal and pro-environmental than Republicans in the United
States (Dietz, Leshko, and McCright 2013). A community’s share of pro-environmental voters
has been used as a proxy for community environmentalism in many studies. Scholars document
that, holding all else equal, localities with a higher share of Democrats or pro-environmental
voters are more likely to undertake climate protection actions (Krause 2011; and Lee and Koski
2015).
Presumably, a large share of pro-environmental voters would motivate local political leaders
to develop community-wide renewable energy capacity and pass corresponding strategies to
align with the interest of the local electorate. The majority of pro-environmental voters would be
more likely to transform their environmental preferences formally into local environmental
policies in mayor-council cities where mayors are particularly politically motivated.
H5-A: Municipalities with a high percent of pro-environmental voters are more likely to
29

adopt local renewable energy goals when they have mayor-council structures than council-
manager structures.
H5-B: Municipalities with a high percent of pro-environmental voters are more likely to
adopt local solar energy goals when they have mayor-council structures than council-manager
structures.

Homeownership
Homeowners are another group of local residents who may support an increase in local
renewable energy generation, particularly favor onsite generation systems that are financially
beneficial to them, and therefore may push local governments to facilitate renewable energy
development. Theoretically, residents who are homeowners strongly favor policies that aim to
protect the local environment and to preserve home values. Fischel (2001) coined the term
“homevoters,” who control local land use through political activities that invest in local
environmental protection and quality of life to increase the value of their most valuable asset.
Renewable energy technologies, particularly onsite solar PV panels, not only improve local air
quality but reduce occupants’ electricity bills. Dastrup et al. (2012) document that the value of
solar installations transforms into home price premiums in real estate markets. Contrary to
homeowners with motivations to invest in their houses, renters often do not install solar systems
since they do not own their homes. Shared solar programs allow multiple customers to own or
lease a portion of a solar array even when they do not own the rooftops, but collectively owned
solar systems have not been as established as those owned by single-family households.
Therefore, homeowners, compared to renters, are more incentivized to support local policies that
enable the installation of distributed generation or onsite solar energy systems.
H6-A: Homeownership is positively associated with the adoption of local renewable energy
30

goals.
H6-B: Homeownership is positively associated with the adoption of local solar energy
goals.

Other local characteristics that are also influential in city-level renewable energy decision-
making include population size, local land use, employment, demographics, and solar resources.
Many studies characterize the size of population as an indicator of municipal general capacity
(Homsy and Warner 2015; Krause 2012; Kwon, Tang, and Kim 2015; and Wang 2012). Holding
all else equal, large cities collect more tax dollars, hire more staff, and have more resources in
hand. Also, large cities are more likely to face complicated and intense environmental challenges
and therefore are more motivated to take actions to improve local environmental quality (Kwon,
Tang, and Kim 2015). However, it is usually more difficult for large cities to attain a high
percentage of renewable energy generation due to its complex, large-scale energy needs. Small
cities and communities are more likely to achieve high renewable energy goals (IEA 2009).
Urban and rural areas have very different land use regulations, as well as community
density, that affect energy use of communities and the deployment of renewable energy
technologies. In general, urban areas contain high-density and mix-used development with a
large population. On the other hand, rural and small communities are usually low in development
capacity due to a small and low-density population, lack of financial resources, insufficient staff
and skills, and less diverse economic activities (McGuire et al. 1994). While some argue that
low-density development increases energy consumption and vehicle miles travelled (Brownstone
and Golob 2009), others argue that dense urban development could potentially result in higher
levels of energy usage and GHG emissions (Bulkeley and Betsill 2005). However, it also needs
to be considered that decentralized solar PV systems are usually installed on rooftops or vacant
31

fields. Low-density communities have more land supply and create less shade that could eclipse
solar panels. Taking all together, municipalities’ level of urbanization has a nonmonotonic
relationship with local energy use as well as the utilization of renewable energy technologies.
Nevertheless, the level of urbanization should be included in the analysis of local climate and
renewable energy policy adoption.
Unemployment problems may motivate local governments to develop renewable energy to
pursue the co-benefit of job creation (IEA 2009). Renewable energy investments, solar power
installations, and energy efficiency improvements are expected to create jobs locally (Yi 2013). It
is found that both state and local climate and clean energy policies are positively associated with
the number of green jobs in metropolitan areas in the United States (Yi 2013).
The levels of household income and citizens’ education are also influential to environmental
policymaking (Krause 2011). Household income and citizen education attainment of localities
are commonly controlled in studies investigating local climate and energy policy adoption
(Homsy and Warner 2015; Millard-Ball 2012; and Wang 2012; 2013). Renewable energy
technologies are expensive, and therefore affluent communities are more likely to have a high
level of rooftop solar penetration. The educational attainment of residents, on the other hand, can
be an indicator of a community’s expertise with regard to local environmental policymaking
(Zahran et al. 2008). In addition, solar resources directly impact the revenue flow of solar energy
systems. Low-latitude cities, which as a result of their locations enjoy strong sunlight, are more
likely to utilize policy instruments to facilitate solar PV technologies in jurisdictions (IEA 2009).
Data and method
The primary data of this analysis were drawn from a solar survey conducted by the
International City/County Management Association (ICMA). Mailed to city and county
32

governments in the United States with a population of 2,500 or more, the 2011 Solar Survey of
Local Governments solicited information surrounding the adoption of renewable energy and
solar initiatives. Responding municipalities represented all 50 states, providing a wide variation
for good data analysis. Among all responding localities, about 25% of local governments had
adopted local renewable energy goals; 15% had adopted local solar energy goals. After cleaning
missing survey data, the sample size came down to 577 county and city governments, still a
significant number for a city-level quantitative analysis. Information about the sample
representation in each state can be found in Table 1.
The analysis’ two dependent variables are local renewable and solar energy goals, coded
dichotomously (if a local government had adopted a local renewable or solar energy goal, the
locality is coded as 1; otherwise 0). Because not every state has RPS is attached with solar set-
asides, the analysis respectively examines the impact of RPS and solar set-asides on local
renewable energy and solar energy goal adoption in Model 1 and 2. As detailed below,
independent variables are categorized into multilevel governance variables and variables of
municipal capacity, form of government, and pro-environmental voters. See Table 2 for variables
description and sources, and Table 3 for descriptive statistics.
Multilevel governance variables
Type I multilevel governance suggests that municipalities located in states that have adopted
statewide renewable energy goals are more likely to adopt local renewable energy goals,
compared to their municipal peers located in states that have no statewide renewable energy
goals. Consequently, two statewide renewable energy goals are identified as Type I multilevel
governance variables: states’ adoption of RPS and solar set-asides or credit multipliers, both
coded dichotomously.
Two control variables at the state level are included in the analysis. First, because
33

developing clean energy places states at risk of losing jobs in the coal and natural gas industries
(Wei, Patadia, and Kammen 2010), percent of oil and gas extraction—as well as states’
petroleum and coal manufacturing gross domestic product GDP—was collected to measure the
level of potential political obstacles for statewide renewable energy development. The second
control variable is the number of solar community organizations (SCOs) at the state or regional
levels, representing a positive organized force that drives the deployment of solar energy
technologies in a state. The data were derived from the study of Noll, Dawes, and Rai (2014)
who surveyed various types and the serving-boundaries of SCOs in the United States. By their
definition, SCOs are organizations that engage in activities to encourage the adoption of
residential onsite solar PV technologies. Community-wide clean energy initiatives are often
developed through collaborative planning with stakeholder groups (Pitt and Bassett 2013). The
presence of SCOs represents organized interest and knowledge to increase local solar energy
capacity.
The Type II hypotheses suggest local governments that interact with other jurisdictions
through transnational climate networks and regional coordination are more likely to adopt local
renewable and solar energy goals than those who do not. The first Type II independent variable
indicates the ICLEI membership of a locality. Drawn from the ICMA Solar Survey, the first Type
II independent variable indicates whether a local government has coordinated with neighboring
local governments on solar initiatives.

Local-level independent variables
This analysis includes municipal capacity, form of government, constituent preference, and
homeownership as local-level independent variables. This study measures a municipality’s fiscal
capacity by total revenue per capita. Technical capacity for municipal renewable energy planning
34

is operationalized by the presence of local sustainability staff or consultants in local
governments. The last variable of municipal capacity is the ownership of a municipal utility that
provides local governments with additional fiscal and technical capacity and political feasibility
to develop community-wide renewable energy goals.
To quantify the notion of community pro-environmental awareness, the author collected
municipal data on the percentage of voters in favor of the Democratic presidential candidate in
2008. To test the hypothesis that a high percentage of pro-environmental voters in mayoral cities
is more likely to lead to local renewable and solar energy goals than in council-manager cities,
the author created a variable equaling the product of the governmental form and the fraction of
voters for the Democratic presidential candidate in the 2008 election. A municipality that
features the council-manager form would have a zero value of the governmental form and would
cause the percent of Democratic voters to have no weight on the new multiplied variable.
Contrarily, a mayoral city would give the percent of Democratic voters a positive value to the
new multiplied variable.
Control variables include logged population size, the percent of housing units located in a
locality’s urban areas,
2
unemployment rate, logged median household income, percent of
bachelor degrees, and latitude of a city or county. However, logged median household income
and percent of bachelor degrees are highly correlated, with the correlation equaling 0.75. To
eliminate the multicollinearity issue, an auxiliary regress of the median household income on
percent of bachelor degree is implemented and produces a new variable. As a result, the
coefficient of the new variable derived by the two-stage estimation in the primary regression
models represents a joint effect of household income level and residents’ educational attainment

2
Defined by 2010 Census, an urban area comprises densely-developed census tracts that meet required minimum
population density and is surrounded by residential, commercial, and other non-residential urban land uses. To
qualify as an urban area, the territory has 2,500 people or more.
35

in a city on the two dependent variables.
3
Meanwhile, collinearity diagnostic measures found no
multicollinearity issues among other variables, with the mean variance inflation factor (VIF)
around 3.10 for both models.
Method
This study utilizes multilevel mixed-effects logistic regression models because the
dependent variables are located at the lower level with dichotomous values of 0 or 1.
Increasingly utilized in studies around adoption of local climate and sustainability initiatives
(Homsy and Warren 2015; Lee and Koski 2015; and Krause 2011) and local energy program
implementation (Terman and Feiock 2015), multilevel analyses detect the explanatory power of
higher-level (state) and lower-level (local) factors to dependent variables at the lower level.
Nesting local governments within states, the method examines both the impacts of state-level
renewable energy policies and local characteristics on the adoption of local renewable energy
goals.
Results
After running the multilevel mixed-effects logistic regression models on both local
renewable and solar energy goal adoption, as expected, the results support the Type I (H1-A)
hypotheses that state-level renewable energy goals are positively associated with local renewable
energy goal-setting. As Table 4 indicates, the presence of RPS increases the likelihood of local
renewable energy goal-setting, while solar set-asides are not found significant to predict local
solar energy goal-setting. While the results do not support the hypothesis that ICLEI membership
(H2) explains local renewable and solar energy goal-setting, regional coordination (H3), the

3
From the linear auxiliary estimation, the author obtained the coefficient as 3.2626 and the intercept as 10.2748
with a value of 0.5589 adjusted R square. The result suggests the linear relationship between the two variables as
(logged median household income in a city) = 3.2626*(percent of bachelor degree) +10.2748.
36

other Type II variable, is found to increase the likelihood for the adoption of local renewable and
solar energy goals. The difference of results demonstrates that membership in transnational
climate network is not as influential as participation in regional coordination with nearby
jurisdictions on solar initiatives to local renewable energy goal adoption.
As expected, the results support the hypothesis that municipal capacity is positively
associated with the adoption of local renewable and solar energy goals. Revenue per capita is
found positively associated with solar energy goal-setting but not renewable energy goal-setting,
suggesting that fiscal resources especially contribute to increase in local solar energy provision.
This result may be explained by the fact that rooftop solar panels are more expensive than other
renewable energy technologies such as centralized windmills. Affluent local governments are
more likely to administer financial incentives to residential and commercial solar installations.
Technical capacity is found to be a strong predictor for both local renewable and solar energy
goal-setting. In both models, hiring sustainability staff is found to increase the likelihood for
local governments to adopt renewable and solar energy goals. Local governments hiring
sustainability staff are about 3 times more likely to adopt local renewable energy goals and 9
times more likely to adopt local solar energy goals than those without sustainability staff. Lastly,
the results suggest that ownership of municipal utilities is positively associated with local
renewable energy goal-setting, confirming that the presence of municipal utilities provide
additional capacity to local governments that aids renewable energy policymaking.
The H5 was not supported by the analysis, indicating that form of local government and
percentage of Democratic voters have no effects to local renewable and solar energy goal-setting.
Rather than supporting the hypothesis that homeowners would be in favor of local renewable
energy development due to an expected increase in property value (H6-A), the results indicate
that the percent of homeowners in a city is negatively associated with local renewable energy
37

goals. This finding counters Fishel’s (2001) argument that homeowners favor local
environmental improvements that protect their property values. As the percent of urban housing
units in a city is found to have a positive correlation with local renewable energy goals, it is
possible that urban cities have a higher capacity to develop renewable and solar energy goals
while concurrently having a lower percent of homeowners compared to rural areas. Homsy and
Warner (2015) report similar findings and presumed the negative association between
homeownership rates and local sustainability actions may be explained by NIMBYism (Not-In-
My-Backyard). Perhaps homeowners are concerned with mixed-use development and renewable
energy investments that may bring uncertainty to their communities, such as noise from nearby
windfarms or perceived unsightliness of windmills or solar panels (Van der Horst 2007). Stevens
and Senbel (2012) also found homeownership rates are negatively associated with the adoption
of municipal climate reduction targets.
Table 5 summarizes the regression results and presents the relationships between the
independent variables and dependent variables in both models. Among the local-level control
variables, population size is found negatively associated with local solar energy goal-setting. In
other words, smaller municipalities are more likely to adopt solar energy goals. Given the
complexity of its economic activities, a large city may utilize wide varieties of renewable energy
sources—for example, biogas from a landfill, distributed generation on public and private
rooftops, and solar water heaters for households—instead of limiting itself to a single renewable
source such as solar. The percentage of housing units located in urban areas are shown as
significant factors that increase the likelihood of local renewable energy goal-setting.
Unemployment rate, education and household income level, and latitude of a locality do not
appear to have correlations.
To further analyze the impact of Type I and Type II arrangements on local renewable and
38

solar energy goal-setting, Table 6 presents predicted probabilities for key state-level variables
(RPS and solar set-asides) and a key local-level variable (coordination with neighboring
jurisdictions) derived from results in Table 4. As Table 6 demonstrates, both state-level
renewable energy goals and engaging in regional coordination with nearby jurisdictions on solar
initiatives increase the likelihood of local renewable and solar energy goal-setting. For example,
local governments located in states without RPS and do not engage in regional coordination have
a low likelihood of adopting renewable energy goals (10% probability) and solar energy goals
(5%). However, municipalities located in states with RPS and solar set-asides without jointly
planned solar initiatives with neighboring jurisdictions become more likely to adopt local
renewable energy goal (17%) and solar energy goal (7%). Municipalities located in states
without RPS and solar set-asides but engage in regional solar planning are even more likely to
adopt local renewable energy goals (26% probability) and solar energy goals (15%). The
comparison of predicted probabilities shows that Type I and Type II governance are
complementary to motivate local renewable and solar energy goal-setting, while the magnitude
of Type II influence appears to be stronger in this analysis.
Discussion and conclusion
Renewable energy is a governance issue that requires policy efforts across governmental
authorities at different levels. This research investigates state- and local-level institutions and
factors that influence local renewable and solar energy goal-setting through a multilevel
governance approach. The results support the influence of multilevel governance and suggest
that both hierarchical measures (Type I) and horizontal coordination (Type II) are
complementary facilitators for local renewable and solar energy goal adoption. This research
demonstrates the importance of state leadership as well as regional coordination in motivating
39

local governments’ policy efforts to increase renewable and solar energy provision. Previous
studies have found that RPS effectively increase in-state renewable generation in the United
States (Carley 2009; and Yin and Powers 2010). Adding to the literature, this study finds
evidence that RPS encourages local renewable and solar energy goal-setting.
This study also highlights the importance of Type II arraignments encouraging local
renewable energy policymaking. Compared to hierarchical measures, horizontal coordination
appears to be a stronger motivation for local governments to adopt renewable and solar energy
goals. These results provide evidence to back scholars’ observations that local governments
commonly interact with other municipalities on energy planning issues (Berkhout and Westerhoff
2013; Busche 2010; and Pitt 2010). Between the two Type II network variables, coordination
with neighboring jurisdictions is found positively associated with local renewable and solar
energy goal adoption, while ICLEI membership is insignificant. These results imply that regional
networks of local jurisdictions on renewable energy planning are stronger facilitators to local
renewable and solar energy goal-setting than national renewable energy networks of
municipalities. Being an active partner of the U.S. SunShot Solar Outreach Partnership, ICLEI
assists local governments in engaging solar energy development by providing information and
technical support. However, it appears that an increase in renewable and solar energy provision
at the local level is better catalyzed by regional coordination efforts among jurisdictions.
In addition to multilevel influences, municipal capacity is also found to influence local
renewable and solar energy goal-setting. Technical capacity is a particularly salient contributor
to local renewable and solar energy goal-setting, as it is the only variable that is found
significantly positive in both models. The strong correlation of technical staffing is coherent to
the hypothesis that community-wide renewable energy goal-setting especially requires
multifaceted knowledge on renewable energy technologies and comprehensive understanding of
40

medium- and long-term energy projection of communities. A city’s fiscal resources is found
influential only in increasing the likelihood of adopting local solar energy goals, rather than
renewable energy goals. This is perhaps due to the reality that solar energy technologies are
particularly expensive among all renewables. The high hardware cost of solar panels has been an
impediment to the deployment of solar arrays (Barbose et al. 2013). In the ICMA Solar Survey,
some respondents highlighted that insufficient fiscal resources are an obstacle to developing
community-wide solar energy. Additionally, this study provides evidence that municipal utilities
play a supportive role and offer additional capacity for local governments to increase renewable
energy provision within jurisdictions. Compared to an investor-owned utility, a municipally
owned utility gives local government more authority and political feasibility to enable the use of
renewable energy technologies (Ostrom 2012).
Homeownership, contrary to Fishel’s (2001) homevoter hypothesis, is found negatively
correlated with the adoption of local renewable energy goals. Rather than supporting local
renewable energy development to preserve property value, homeowners may resist proposed
renewable energy investments due to the potential for local negative impact, such as noise and
visibility (Van der Horst 2007).
Overall, by utilizing a large dataset sampling cities across 48 states in the Unities States,
this study provides empirical evidence supporting the idea that both hierarchical and horizontal
multilevel governance are important facilitators to local renewable and solar energy goal-setting.
While mandates from higher authorities induce local governments to set up renewable energy
goals, coordination with nearby authorities at the same level appears to have a stronger influence
on local renewable energy goal-setting. In addition, this study demonstrates that the presence of
technical staffing fuels local governments to adopt renewable and solar energy goals. Owning a
municipal utility enhances the likelihood of increasing community-wide renewable energy
41

provisions, while fiscal resources are especially catalytic to local solar energy goal adoption.
States remain the prominent policy leaders in renewable energy development in the United
States. However, this research highlights the important role of regional coordination in
renewable energy planning. Future research can further investigate various state- and local-level
conditions and their impacts on local renewable energy development, as well as the relative
strength of hierarchical and horizontal measures in driving local renewable and solar energy
policymaking. In addition, given that low-carbon energy development is an inevitable
international trend, the scope of research can expand to countries or regions that have alternative
governance structures, shedding light on the application of multilevel governance to renewable
energy policymaking in diverse institutional contexts. A closer look at the required municipal
capacity to initiate specific kinds of local renewable energy programs would also help
policymakers and practitioners understand specific resources and their expected costs and policy
outcomes.

42

Appendices
Table 1 Number of cities and counties in each state
State
Number of cities and counties
included in sample
Number of cities and counties with
population 2,500 and above Sample ratio
AL 1 218 0.00
AK 1 41 0.02
AZ 17 90 0.19
AR 2 181 0.01
CA 92 505 0.18
CO 22 154 0.14
CT 9 184 0.05
DE 3 20 0.15
FL 39 334 0.12
GA 13 367 0.04
HI 1 4 0.25
ID 3 94 0.03
IL 27 553 0.05
IN 1 262 0.00
IA 10 232 0.04
KS 12 199 0.06
KY 1 240 0.00
LA 2 169 0.01
ME 7 163 0.04
MD 9 90 0.10
MA 28 297 0.09
MI 15 839 0.02
MN 16 312 0.05
MS 2 171 0.01
MO 9 319 0.03
MT 7 71 0.10
NE 1 121 0.01
NV 6 30 0.20
NH 5 130 0.04
43

NJ 24 546 0.04
NM 7 74 0.09
NY 12 336 0.04
NC 21 322 0.07
OH 15 1073 0.01
OK 4 203 0.02
OR 8 137 0.06
PA 27 444 0.06
RI 1 43 0.02
SC 5 142 0.04
TN 9 238 0.04
TX 22 738 0.03
UT 12 126 0.10
VT 3 88 0.03
VA 16 219 0.07
WA 13 187 0.07
WV 1 105 0.01
WI 15 287 0.05
WY 1 47 0.02
Total 577 11745 -
Average 12.02 244.69 0.05

Table 2 Variables Description and Source
Variable Description Source
Dependent variables
Local renewable energy goal
Which of the following has your local government
adopted or established? (Check all that apply; choices
include a renewable energy goal, a solar installation
goal, and none of the above.)
2011 ICMA Solar Survey
Local solar energy goal
Type I multilevel governance variables
RPS policy
A dummy variable indicating whether or not the state
has adopted renewable portfolio standards by 2011.
Lawrence Berkeley National
Laboratory
Solar set-asides or credit
multipliers
A dummy variable indicating whether or not the state
has adopted solar set-asides or solar multipliers by
2011.
Lawrence Berkeley National
Laboratory
44

State-level control variables
Oil, gas, petroleum, and coal
industries
[(Oil and gas extraction GDP) + (Petroleum and coal
products manufacturing GDP) / GDP by state in
2010]*100.
Bureau of Economic Analysis
Number of solar community
organizations
Number of state- or regional-level solar community
organizations in a state.
Noll, Dawes, and Rai (2014)
Type II multilevel governance variable
Regional coordination
A dummy variable. Has your local government
coordinated with neighboring local governments on
solar initiatives?
2011 ICMA Solar Survey
ICLEI membership
A dummy variable indicating whether or not a city has
ICLEI membership.
ICLEI
Municipal capacity
Total revenue per capita
Per capita total revenue of a city or county in 2000
(thousand dollars)
2002 State & Local Government
Finance by Census Bureau
Sustainability staff
A dummy variable indicating whether a city or county
has internal staff or consultants who work on
renewable energy, solar, or sustainability projects.
2011 ICMA Solar Survey
Municipal utility
A dummy variable indicating whether a city or county
has a municipal utility as its primary provider of
electricity in the jurisdiction.
2011 ICMA Solar Survey
Mayor-council form and constituent preference
Form of government
A dummy variable indicating whether a city has a
mayor-council form (1) or a different form (0).
2011 ICMA Solar Survey
Pro-environmental voters
Percent of votes that favored the Democratic candidate
in the 2008 presidential election at the county level.
CQ Voting and Elections
Collection
(Form of government)*(pro-
environmental voters)
(Mayor-council form)*(Percent of votes that favored
the Democratic candidate in the 2008 presidential
election at the county level)
CQ Voting and Elections
Collection, and 2011 ICMA Solar
Survey
Homevoter variable
Homeownership
The homeownership rate of a city, calculated by (total
owner-occupied housing units) / (total occupied-
housing units) in 2011.
American Community Survey
Local-level control variables
Population (log) Logged population of each city or county in 2010 Census Bureau
45

Level of urbanization
Percentage of housing unit count in urban areas in a
city or county in 2010.
Census Bureau
Unemployment
Percent of unemployed for a population 16 years and
over in a city or county in 2011.
American Community Survey
Income
Median household income (dollars) in a city or county
in 2011.
American Community Survey
Income (log)
Logged median household income (dollars) in a city or
county in 2011.
American Community Survey
Education
Percent of persons with a bachelor’s degree for the
population 25 years and over in 2011.
American Community Survey
Latitude Latitude of a city American Community Survey

Table 3 Descriptive Statistics
Variable N Mean SD Min Max
Dependent variables
Local renewable energy goal 577 0.249567 0.433138 0 1
Local solar energy goal 577 0.147314 0.354726 0 1
Type I multilevel governance variables
RPS policy 50 0.58 0.49857 0 1
Solar set-asides or credit multipliers 50 0.4 0.49487 0 1
State-level control variables
Percent of oil, gas, petroleum, and coal extraction and manufacturing
GDP
50
2.52822 5.27631 0.04241 23.3949
Number of solar community organizations 50 3.98 5.71961 0 31
Type II multilevel governance variable
Coordination with neighboring municipalities 577 0.216638 0.412311 0 1
ICLEI membership 577 0.187175 0.39039 0 1
Municipal capacity variables
Revenue per capita (thousand dollars) 577 2.111317 1.571082 0.068358 10.56889
Sustainability staff 577 0.693241 0.461549 0 1
Ownership of municipal utility 577 0.098787 0.298635 0 1
Mayor-council form and constituent preference
Mayor-council form 577 0.258232 0.438042 0 1
Percent of pro-environmental voters 577 0.530054 0.131155 0.1808 0.8887
(Mayor-council form)*(percent of pro-environmental voters) 577 0.134049 0.238135 0 0.8416
46

Homevoter variable
Homeownership rate, 2011 577 0.610404 0.205203 0 0.996877
Local-level control variables
Population 577 118164.3 315582.2 2428 3817117
Population (log) 577 10.35806 1.524576 7.794823 15.15501
Percent of housing units located in urban areas 577 0.88321 0.232881 0 1
Unemployment rate 577 0.081355 0.030821 0.017 0.224
Median household income 577 60693.29 26930.64 14451 208750
Percent of bachelor’s degree 577 0.20422 0.088848 0.039 0.49
Latitude 577 38.29037 4.941728 22.012 61.1775

Table 4 Multilevel Mixed-Effects Logistic Regression Results: Local Renewable and Solar
Energy Goal-Setting in the United States

1. Local renewable energy goal-setting 2. Local solar energy goal-setting
Type I multilevel governance variables
RPS policy 0.66* (0.36) -
Solar set-asides or credit multipliers - 0.33 (0.40)
State-level control variables
Pct. GDP of oil, gas, petroleum, and coal 0.01 (0.04) -0.01 (0.06)
Number of solar community organizations 0.02 (0.01) 0.02 (0.02)
Type II multilevel governance variable
Coordination with neighboring municipalities 1.17*** (0.25) 1.13*** (0.30)
ICLEI membership -0.01 (0.29) 0.30 (0.35)
Municipal capacity variables
Revenue per capita -0.00 (0.08) 0.19** (0.09)
Sustainability staff 1.23*** (0.31) 2.24*** (0.51)
Ownership of a municipal utility 1.33*** (0.36) 0.60 (0.43)
Mayor-council form and constituent preference
Mayor-council form 0.12 (1.10) 0.36 (1.24)
Pct. Democrat voters 0.05 (1.16) -0.23 (1.50)
Mayor-council form*Pct. of pro-environmental
voters 0.25 (1.94) 0.55 (2.16)
Homevoter variable
Homeownership rate -2.67*** (0.64) -0.83 (0.83)
47

Local-level control variables
Population (log) 0.06 (0.09) -0.21** (0.11)
Pct. urban housing units 1.95** (0.82) -0.31 (0.71)
Unemployment rate -5.63 (4.84) 7.83 (5.64)
Joint effect of education and household income 0.01 (0.50) -0.36 (0.64)
Latitude of a city -0.02 (0.03) -0.02 (0.04)

Constant -3.17** (5.58) 2.04 (7.19)
Observations 577 577
Number of groups 48 48
P > χ 2 0.0000 0.0000
Probability levels are denoted as follows: *** p<0.01, ** p<0.05, * p<0.10

Table 5 Hypotheses and observed effects
Hypothesis Independent variables Observed effect

Local renewable energy goal Local solar energy goal
Type I multilevel governance (+) RPS (+) -

Solar set-asides or credit multipliers - (+)
Type II multilevel governance (+)

Coordination with neighboring
municipalities
(+) (+)
ICLEI membership (+) (+)
Municipal capacity (+) Revenue per capita (-) (+)

Sustainability staff (+) (+)
Municipal utility (+) (+)

Mayor-council form and constituent
preference (+)
(Pct. of voting Democrat
president)*(Mayor-council form)
(+) (+)
Homevoters (+) Homeownership rate (-) (-)
Signs in bold are statistically significant coefficients.

Table 6 Predicted Probabilities of Local Renewable and Solar Energy Goal-Setting by the
Presence of State-Level Renewable Energy Goals (RPS or Solar Set-Asides) and Coordination
with Neighboring Jurisdictions

48

State RPS
Coordination with neighboring
jurisdictions
RE goal
No No 0.10

Yes 0.26
Yes No 0.17
Yes 0.40

Solar set-asides
Coordination with neighboring
jurisdictions Solar goal
No No 0.05

Yes 0.15
Yes No 0.07
Yes 0.20

49

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57

CHAPTER 2
PREDICTORS FOR ADOPTION OF LOCAL SOLAR APPROV AL
PROCESSES AND IMPACT ON RESIDENTIAL SOLAR INSTALLATIONS
IN CALIFORNIA CITIES

Abstract
Local governments and policies hold an important role in stimulating the growth of solar
photovoltaic (PV) installations. By improving local solar permitting processes, city governments
can potentially reduce the “soft” costs of solar PV systems and facilitate the deployment of solar
PVs at the local level. Drawing data from California’s annual statewide planning surveys, this
paper examines the determinants for the adoption of solar approval processes and the policy
impact on residential solar PV installations in California cities. The results demonstrate that
cities with municipal utilities and high proportions of pro-environment, educated constituents are
more likely to adopt solar approval processes. Additionally, the presence of local solar approval
processes is found to increase both total capacity and the number of installed small-scale
residential solar PVs in a city, holding all else equal. The empirical evidence presented in this
research confirms the important role of local governments in the deployment of solar PVs.

Introduction
In recent years, solar energy has experienced tremendous growth in the United States.
Thanks to continuously decreasing solar hardware costs, the average cost of solar photovoltaic
(PV) panels has fallen more than 60% since 2010 (DOE 2016a). The installed solar capacity has
grown about 22 times over the past eight years, from 1.2 GW in 2008 to 27.4 GW in 2015 (DOE
2016b). The United States reached one million solar rooftop installations in early 2016, and the
58

number of installations may double in the next two years (DOE 2016c). Rooftop solar energy
systems, compared to centralized renewable energy plants, are built close to electricity
consumers with the potential benefits to create local jobs, stabilize electricity prices, prevent
transmission power loss, and increase electricity reliability for local businesses and families
(OPR 2012a).
However, unlike declining hardware costs, the non-hardware (“soft”) costs of solar
energy had held steady and have finally begun to decline in recent years (Barbose and Darghouth
2016). Soft costs—such as labor, taxes, permitting fees, and transaction costs—account for more
than 50% of the total system installation cost (Barbose et al. 2013; and Friedman et al. 2013).
Soft costs can potentially be decreased by the spillover benefits from learning-by-doing related
to the cumulative experience with technology (Van Benthem, Gillingham, and Sweeney 2008),
enhancing knowledge-sharing among the manufactures, installers, and end-users of rooftop solar
energy technologies (Taylor 2008), or improving local solar permitting procedures (Burkhardt et
al. 2015). Understanding the factors reducing rooftop solar soft costs would make solar PV
systems more affordable and generate a higher penetration of rooftop solar energy in the United
States.
Public policy and governmental agencies hold leading roles in reducing rooftop solar soft
costs. State governments can regulate the information disclosures and product assurance of
renewable energy technologies to protect consumers and facilitate the development of renewable
energy markets. Federal, state, and regional agencies can provide guidance to local governments
about removing potential barriers for renewable energy installations and standardizing local solar
permitting procedures to create consistent installation requirements across municipalities
(Busche 2010; and Stanfield, Schroeder, and Cully 2012). In this effort, the Department of
Energy, California Governor’s Office of Planning and Research, and the California County
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Planning Directors Association have published guidebooks to assist local governments in
modifying and improving local solar permitting processes for timely and efficient permit review
(CCPDA 2012; DOE 2011; and OPR 2012a).
Typically, the application of solar PV installations requires multiple local agency reviews,
such as building, electrical, fire, and structural approvals. Unreasonable reviewing processes or
restrictions would discourage the deployment of solar installations (Anders et al. 2014).
Additionally, different solar permitting processes and fees across local jurisdictions can cause
confusion to the builders and installers of solar PV systems and make solar installations even
more expensive (OPR 2012a). By standardizing local permitting regulations, local governments
play a key role in reducing the soft costs of solar installations and facilitate the deployment of
solar PVs at the local level (Burkhardt et al. 2015; Dong and Wiser 2013; Friedman et al. 2013).
Creating consistent permitting processes across a state or region also enables local jurisdictions
to pool resources as well as share plan-reviewing experiences, inspection staff, and informative
workshops (DOE 2011).
However, while most extant literature has examined the role of federal and state
governments and policies in solar energy development, less work has examined their local
counterparts. State-level solar energy policies—such as solar set-asides, net metering rules, and
cash incentives—are found to drive the deployment of solar PVs (Krasko and Doris 2013; and
Sarzynski, Larrieu, and Shrimali 2012). At the local level, the availability of financial incentives
in large U.S. cities is found positively associated with installed solar PV capacity (Li and Yi
2014). However, the impact of city-level solar permitting processes on the deployment of solar
installations at the local level has not been well studied. While improving the design of city-level
solar permitting practices is found to reduce average residential PV prices (Burkhardt et al. 2015;
and Dong and Wiser 2013) and shorten development times (Dong and Wiser 2013), its impact on
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residential solar PV installations remains unclear. Here, this article first examines factors—both
at the organization (i.e. city governments) and community levels—that influence cities’ decisions
to adopt local solar approval processes in California. Then, this article quantitatively analyzes the
impact of local solar approval processes on the size (kW) and number of small-scale residential
solar PV installations in cities.
Compared to some local sustainability actions, renewable energy strategies are particularly
difficult and less prioritized municipal sustainability actions due to high upfront costs and high
municipal competence that are required (Aznar et al. 2015; and Kwon, Jang, and Feiock 2014).
While numerous studies have investigated the socioeconomic and political factors that influence
cities’ adoption of climate change policies, only few quantitative analyses have looked into local
energy policy adoption. In these studies, scholars found that municipalities with large population
size (Homsy 2016; and Pitt and Bassett 2014), elected mayors (Kwon, Jang, and Feiock 2014),
the presence of a municipal utility (Homsy 2016), high residents’ education attainment (Kwon,
Jang, and Feiock 2014), and high degree of civic engagement (Homsy 2016; and Pitt and Bassett
2014) are more likely to adopt energy reduction strategies and clean energy policies.
Built on and contributing to the energy policy adoption literature, this paper examines the
influences of municipal capacity and resources, political factors, and demographic,
socioeconomic, and climate characteristics in cities’ decision-making in adopting local solar
approval processes in California. Among all fuel types of renewable distributed generation,
California has particularly promoted solar energy, offering statewide cash back to qualified
customers for installing solar energy systems. Evolving from Gov. Arnold Schwarzenegger’s
“Million Solar Roofs” vision for California, the California Utilities Commission (CPUC)
launched the California Solar Initiative (CSI) in 2006, a 10-year program of a $2.17 billion
budget with the goal to reach 1,940 MW installed solar capacity, targeting customers of
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California’s major investor-owned utilities (IOUs) (CPUC 2014). Since then, these substantial
subsidies had drastically increased the solar PV adoptions in California (Bollinger and
Gillingham 2012). Additionally, Gov. Jerry Brown has set a statewide goal of 20 gigawatts
(GW) of renewable electricity by 2020, consisting of 12 GW distributed generation and 8 GW
large-scale renewables (OPR 2010). As of October 2016, solar energy accounted for
approximately 80% of California’ distributed generation, equivalent to 7.3 GW (CEC 2016).
Furthermore, California’s solar energy is likely to continue shining in the coming years. Thanks
to abundant solar radiation and rooftop suitability, California has the greatest solar rooftop PV
potential among all states (Gagnon et al. 2016).
Required by the California Solar Rights Act, local solar approval processes offer an
administrative, nondiscretionary review procedure for permitting residential rooftop solar energy
systems that are no larger than 10 kilowatts (kW). The use of local solar approval processes can
be viewed as a policy effort to remove unreasonable barriers to the installations of small-scale
residential solar energy systems. This study considers cities’ adoption of solar approval
processes as an early commitment to simplify local solar permitting procedures. The primary
data that indicates whether a city has adopted a local solar approval process was drawn from
California’s annual statewide planning surveys, which inquired about local planning activities
and were delivered to all local governments. With high response rates of 86% in 2011 and 87%
in 2012, the respondents consisted of California cities that vary in size, as well as institutional,
socioeconomic, and climate conditions.
Based on data from these surveys and other publicly available sources, this article
investigates the predictors for the adoption of city-level solar approval processes along with the
impact of this process on the size and number of small-scale residential solar installations in
cities. To the author’s best knowledge, this article is the first study that explicitly quantifies the
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impact of local solar approval processes on both the size and quantity of small-scale residential
solar PV installations in California cities; previous analyses measured only one outcome to
evaluate local solar permitting impact. The results demonstrate that cities with a large population
size, ownership of a municipal utility, high degree of residents’ environmental ideology, high
percent of bachelor degree holders, and lower density are more likely to adopt solar approval
processes. Additionally, the results demonstrate that the adoption of solar approval processes
increases both the number and capacity (measured in terms of total KW generation) of small-
scale residential solar PV installations in the following year in a city, holding all else constant.
Supported by both models with and without fixed effects, the evidence suggests that the presence
of local solar approval processes is positively associated with the size and number of solar PV
installations in a city. The findings highlight the important role of local governments in
facilitating solar installations and lead to the conclusion that standardizing and streamlining local
solar permitting processes potentially reduces the soft costs of solar PV systems and encourages
the deployment of small-scale residential solar PVs at the local level.
In the following essay, the first section will provide an introduction of local solar approval
processes. The author will then discuss the factors influencing the adoption of local solar
approval processes and the deployment of residential solar PVs, drawing from the two bodies of
literature: local energy policy adoption and the deployment of residential solar PVs at the local
level. After introducing data and methods, the analytical results will be presented. The final
section will offer discussion and conclusion.
Local solar approval processes
Governed by state governments, local governments in the United States have the authority to
pass and implement energy and climate policies and programs. For example, California’s state
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law requires cities and counties to enforce Title 24, known as the state’s building standards, to
govern rooftop installations on buildings (OPR 2012a). Counties and cities can design and adopt
local ordinances by modifying state building codes to adapt local climatic and geographical
conditions. In addition, cities can establish stringent standards beyond state requirements to
create favorable regulations for rooftop distributed generation installations. By contrast, in some
cases, local ordinances may pose obstacles to rooftop solar PV installations. For example, some
local zoning ordinances restrict erection of structures no higher than 35 feet and can prohibit
some solar panel installations.
In addition to state-level building codes and standards, some states have adopted solar rights
acts to demonstrate leadership and exert control over local solar permitting procedures (Kettles
2008). These acts commonly limit the ability of public agencies and private entities to prohibit
solar installations through restrictive covenants, ordinances, and building codes (Stanfield,
Schroeder, and Cully 2012). The use of local simplified permitting processes that include only
relevant elements and necessary requirements for rooftop solar installations can increase installer
compliance rates and save time and money for both installers and local agencies. While few
studies have examined the impact of various solar permitting process designs on residential solar
installations (Li and Yi 2015) and solar installation prices (Burkhardt et al. 2015; and Dong and
Wiser 2013), this analysis examines the adoption and impact of an early California’s policy effort
for simplifying solar permitting procedures across localities—solar administrative approval
processes that are governed by the California Solar Rights Act. The California Solar Rights Act
was passed by the California Legislature in 1978 to limit the abilities of local governments and
homeowner associations to restrict solar installations (Anders et al. 2014). As an establishment of
state leadership in simplifying local solar approval process, the Act provides strong protection
against local government from placing barriers on permitting solar energy installations and
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restricts local subjective in reviewing the applications of solar energy installations (Stanfield,
Schroeder, and Cully 2012). Specifically, Government Code Section 65850.5 specifies that “it is
the intent of the Legislature that local agencies not adopt ordinances that create unreasonable
barriers to the installation of solar energy systems.” Additionally, the Act requires local
governments to use an administrative, nondiscretionary review procedure for permitting
residential rooftop solar energy systems that are no larger than 10 kW. Governed by this Act,
local governments cannot deny issuing a use permit when proposed solar PV systems or water
heaters comply with codes and impose no public health or safety concerns.
The California Solar Rights Act requires local governments to adopt an administrative,
nondiscretionary approval procedure for permitting solar installations without specifying a
deadline for mandatory adoption nor any monitoring and sanctions in case of noncompliance. It
is reasonable to assume that without a specified adoption deadline, the adoption of solar
administrative approval processes had gradually diffused across cities over the years. Local
governments that had adopted solar approval processes demonstrated an early commitment to
facilitate the deployment of solar residential PV systems within jurisdictions by complying with
the California Solar Rights Act. As shown by California’s annual planning results (OPR 2011;
and 2012b), about 68% of California cities that responded in the 2010 survey had adopted solar
approval processes, and more than 78% of responding cities in the 2011 survey had adopted such
processes. Using the two-year survey data, this paper evaluates the factors that influence
California cities’ early solar progressiveness—the willingness to respond to the state’s statute by
adopting solar administrative approval processes—as well as whether the adoption of such policy
increases the number and total capacity of small-scale residential solar installations in California
cities.
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Literature
This study seeks to answer two research questions: (1) What factors influence California
cities’ adoption of solar approval processes? And (2) does the adoption of local solar approval
processes increase cities’ residential solar capacity? The author identifies two bodies of literature
that are relevant to the research questions: local climate and energy policy adoption, and the
deployment of residential solar PVs at the local level.

Local climate and energy policy adoption
While few papers have examined the determinants specifically for local renewable energy
adoption, a large number of studies have quantitatively investigated the factors that influence the
adoption of local climate and energy strategies. This body of research enhances our
understanding of the influences of municipal resources, political factors, and demographic,
socioeconomic, and climate characteristics on local climate and energy policymaking. Previous
work has identified that cities’ available resources related to environmental policy-making
(Krause 2011; and Wang 2012), fiscal resources (Homsy and Warner 2015), ownership of a
municipal utility (Homsy 2016), local political environment (Bae and Feiock 2013; Sharp, Daley,
and Lynch 2011; and Wang 2012), and demographic and climate characteristics (Millard-Ball
2012) are influential to cities’ decision-making on adopting climate and energy strategies.

Municipal resources
Cities’ available resources have long been considered fundamental to environmental
policymaking and to overcoming potential barriers to initiate innovative policies (Krause 2011;
and Mohr 1969). Previous analyses have identified several forms of municipal resources that
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potentially contribute to the adoption of local climate and energy policies and programs:
population size, planning staff, membership in interlocal climate networks, and ownership of a
municipal utility.
Around the climate and energy policy adoption literature, population size has been widely
considered as an indicator for cities’ overall resources for adopting climate and energy strategies
(Homsy and Warner 2015). Generally, a large population suggests that a local government has
more resources, greater tax bases, and higher human resources to adopt a wide range of policies.
Furthermore, large cities are likely to have complicated energy needs and face political pressures
from various groups of stakeholders. Therefore, large cities may be more motivated to adopt
innovative energy plans and strategies to develop clean energy than small communities (Kwon,
Tang, and Kim 2015). Empirical analyses have shown that population size is positively
associated with the adoption of various types of local climate and energy strategies (Bae and
Feiock 2013; Homsy and Warner 2015; Krause 2011; and Wang 2012).
Fiscal resources of local governments are another key contributor to local climate and
energy program initiation. Renewable energy policies can be particularly difficult to design,
adopt, and implement for city governments, compared to some energy efficiency or energy
saving measures, due to the high upfront costs associated with renewable energy technologies
and high municipal competence regarding renewable energy planning (Aznar et al. 2015; and
Kwon, Jang, and Feiock 2014). For example, if budgets allow, cities may offer rebate, feed-in-
tariff, or other financial incentives to reduce the cost of solar installations for property owners.
Municipalities with high average revenues are found more likely to adopt local solar energy
goals (Hsu 2017), voluntary climate protection commitment (Krause 2011), municipal recycling
programs (Feiock and West 1993), and more numbers of local climate and energy policies
(Homsy and Warner 2015).
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The knowledge and professionalism of city employees are valuable resources for initiating
policy innovation and launching new programs. In facilitating local solar development, city staff
members are significant assets to local governments in designing, adopting, and implementing
solar energy policies and programs. Specifically, planning departments are usually involved in
the modification of local zoning ordinances and building codes that facilitate distributed
generation (EPA 2014). Administrative resources, such as the average number of city planners,
are found positively associated with cities’ voluntary commitment for greenhouse gas emission
reductions (Wang 2012).
Interlocal climate networks provide technical assistance and policy tools to city members
for local climate and renewable energy planning. The International Council for Local
Government Initiatives (ICLEI) is a well-known international organization that promotes local
sustainability around the world. More than 450 cities, towns, and counties in the United States
and roughly 1,100 local governments worldwide possess ICLEI membership (SunShot 2015). In
exchange for an annual fee, municipal members of ICLEI receive technical assistance and
information about local sustainable development. Particularly, ICLEI is a partner of the U.S.
Department of Energy’s SunShot Solar Outreach Partnership, organizing workshops and
conducting outreach to help U.S. local governments take a comprehensive approach to solar
energy development. ICLEI membership has been found to increase cities’ greenhouse gas
reduction activities and sustainability planning (Krause 2012; and Kwon, Tang, and Kim 2015).
Municipal utilities provide additional fiscal and technical resources to local governments
that can be utilized in climate and energy policymaking (Krause 2011; and Homsy 2016). Unlike
investor-owned utilities (IOUs), which are usually privately owned and tend to maximize profits,
municipal utilities are less driven by economic considerations. Public power utilities owned by
local governments are self-governed and have more flexibility in innovation, such as launching
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programs that reduce consumer energy consumption (Ostrom 2012). Additionally, municipal
utilities generate income and provide access to energy-specific grants to local governments,
while municipal utility employees who are knowledgeable about energy equipment and policy
issues can provide technical consultancy (Homsy 2016). In practice, many cities have worked
with municipal utilities to adopt and implement programs that facilitate renewable generation
within jurisdictions (EPA 2014). Taking all together, it is assumed that cities with municipal
utilities are more likely to adopt renewable energy programs, including solar approval processes,
to facilitate the deployment of solar energy systems, compared to cities served by IOUs.

Political factors
Local political environment is another influential factor in cities’ environmental
policymaking and performance. Local governments are sensitive to political pressures and tend
to adopt and implement programs that meet the needs of constituents (Peterson 1995). V oters’
support toward environmental protection can motivate public officials to adopt local climate
protection policies (Krause 2011; and Millard-Ball 2012). In general, Democrats are viewed as
more liberal and pro-environment than Republicans (Dietz, Leshko, and McCright 2013). Prior
research has demonstrated that a high percentage of registered Democrats or a high share of
voters who favor environmentally friendly candidates and propositions in cities increases the
likelihood of the adoption of local climate protection strategies (Krause 2011; Millard-Ball 2012;
and Wang 2012).
Additionally, political institutions of local governments are found correlated with the
adoption of local climate and energy strategies (Bae and Feiock 2013; and Sharp, Daley, and
Lynch 2011). Mayor-council and council-manager structures are the most common institutions of
local governments in the United States. Mayors in mayor-council structures are more
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accountable and tend to enact policies corresponding to constituent preferences than political
leaders in council-manager structures (Terman and Feiock 2015). In addition, with higher
budgetary authority and political autonomy, mayors are more likely to lead policy innovations
(Wang 2012). On the other hand, appointed city managers in council-manager governments tend
to focus more on the efficiency of governmental operation and less on constituent satisfaction
(Bae and Feiock 2013). Scholars have found that mayor-council governments adopt more
numbers of communitywide climate and energy policies (Bae and Feiock 2013), and council-
manager governments are found to adopt more numbers of climate and energy policies directed
to governmental operations (Bae and Feiock 2013; and Homsy 2016). Local solar approval
processes potentially benefit whole communities by reducing the soft costs of rooftop solar PV
installations for builders and system owners, while simultaneously improving the efficiency of
city governments in reviewing and approving solar energy system applications. It is possible that
both mayors and city managers support the adoption of local solar approval processes.

Sociodemographic and climate factors
Local sociodemographic and climate characteristics are also found to be important factors in
local environmental policymaking. For example, residents’ education attainment and household
income level are two factors that are commonly controlled in studies examining local climate and
energy policy adoption (Krause 2011; and Millard-Ball 2012). Residents’ education levels can be
seen as community expertise or civic capacity that facilitates cities’ climate and energy
policymaking (Homsy and Warner 2015; Zahran et al. 2008). Household income level, on the
other hand, indicates communities’ abilities to replace harmful environmental practices with
high-cost environmentally friendly technologies, such as solar PV systems (Wang 2012).
Therefore, cities with high shares of wealthy families may be more incentivized to adopt solar
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approval processes that serve their residents. Similarly, cities exposed to higher solar insolation,
which generate high revenue flows of solar energy systems, may be more likely to utilize policy
instruments to enable local solar PV installations (IEA 2009).
High unemployment rates may motivate governments and communities to develop
renewable energy to create local jobs (IEA 2009). Aiming to generate jobs locally and regionally
in California and also to spur renewable energy development, Gov. Jerry Brown set a stateside
target of installing 12 GW distributed generation and 8 GW centralized renewables by 2020. In
an empirical study, Yi (2013) found local clean energy policies are positively with the number of
green jobs in U.S. metropolitan areas. Other local sociodemographic and climate characteristics
that are controlled in this analysis are housing density, residential electricity consumption, and
solar insolation.

Deployment of residential solar PVs
While most studies focus on the impact of state-level policies on solar PV deployment at the
state level, less work has examined the association between local solar energy policies and solar
PV deployment at the local level. Prior studies have demonstrated the effectiveness of state-level
solar energy policies, especially solar set-asides attached to renewable portfolio standards (RPS),
on installed solar capacity (Steward and Doris 2014; and Wiser, Barbose, and Holt 2011).
Rebates and cash incentives are also found to enable rapid growth of solar PVs in states
(Sarzynski, Larrieu, and Shrimali 2012). In addition, state-level interconnection and net metering
policies are found positively associated with solar PV capacity added in the following year
(Krasko and Doris 2013). Examining both state and local solar policies, Li and Yi (2014) found
RPS and the availability of local solar financial incentives are positively associated with solar PV
capacity in U.S. large cities. The presence of local climate action plans in California, however, is
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not found to increase the number of solar PVs in a city in fixed-effects analyses (Millard-Ball
2012). Other than state and local solar policies, communities’ sociodemographic and climate
conditions also explain the deployment of solar PVs at the local level. Kwan (2012)
demonstrated that household income level, solar insolation, cost of electricity, and percent of
registered Democrat voters are positively associated with the share of housing units with solar
PV installations at the zip code level.
V oter behavior—for example the share of Democrat voters of cities—have been
characterized as an indicator for residents’ collectively environmental ideologies (Kahn 2007;
Krause 2012; Kwan 2012; Millard-Ball 2012; and Wang 2012). A high percentage of individuals
who vote in favor of Democrat candidates and environment-friendly propositions is measured as
the “greenness” of a community, where environmentally friendly products are likely to be more
prevalent. Prior studies demonstrate that communities with a high degree of aggregate residents’
environmental ideology own more solar homes, hybrid vehicles, and green buildings certified by
LEED (Dastrup et al. 2012; Kahn 2007; and Millard-Ball 2012).
High administrative capacity of city governments may facilitate the deployment of solar PV
systems. For example, city staff can assist customers in obtaining solar PV information through
websites, educational brochures, or workshops (Li and Yi 2014). Additionally, city staff are
responsible for reviewing solar energy applications and issuing permits to solar installers. Once
applications are approved and proposed solar systems are installed, an inspector would visit the
sites to assess whether installations are consistent with plans and comply with regulations. If city
staff do not administer the reviewing and inspection procedures themselves, these tasks are
usually outsourced and require cities’ additional fiscal commitment.
To summarize, as identified above, the potential predictors for the adoption of local solar
approval processes—including municipal resources, political environment, and
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sociodemographic and climate conditions—will be examined in Model 1. Then, the impact of
local solar approval processes on small-scale residential solar installations in California cities
will be analyzed in Model 2. As shown below, the next section will introduce the data and
methods that are utilized respectively in Model 1 and 2.
Data and method
Data
Table 1 provides detailed variable descriptions and data sources. Model 1’s dependent
variable is a binary variable, indicating the presence of a local solar approval process in a city of
a year, drawn from California’s annual statewide planning survey reports. Particularly, the
dependent variable is coded from question 7 in the 2011 survey results and question 26 in the
2012 survey results, inquiring whether the jurisdiction has developed an administrative approval
process for solar energy systems (1=yes, 0=no). Both questions specify that cities and counties
are required by Government Code Section 65850.5 to administratively approve solar energy
systems. Among the city respondents in the 2010 survey, about 68% of California cities had
adopted solar approval processes, and more than 78% of responding cities in the 2011 survey had
adopted such processes. The author assumes that once a city had adopted a solar approval
process, the adoption would not be reversed. Therefore, this dataset includes all California cities
in 2010, and cities that had adopted solar approval processes in 2010 are eliminated from the
2011 observations.
In Model 1, the first set of independent variables includes municipal resources, political
environment, and sociodemographic and climate factors. The overall municipal resources of a
city are operationalized by city population. Fiscal recourses are measured by revenue per capita
of a city. Professional city staff who may support the design and adoption of local solar approval
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processes are calculated by the number of planners per thousand persons in a jurisdiction. ICLEI
membership represents technical resources for solar energy planning that city governments can
assess. Ownership of a municipal utility provides additional fiscal and technical resources to
local governments in solar energy policymaking.
The first independent variable of local political environment is residents’ environmental
ideology in a city, constructed by principal component analysis, using the data of Democratic
Party membership, one presidential voting outcome, and seven environmental proposition voting
results. The selected seven propositions cover such environmental issues as climate change,
renewable energy generation, alternative fuel vehicles, oil tax, and water quality in California.
Table 2 provides a full list of data descriptions and sources as well as the details of the principal
components analysis. The first component is selected, with the eigenvalue greater than 2, and
constructed as positively associated with the level of local environmental ideology in a city. As a
result, the total eight voter records are converted into one single variable to avoid the collinearity
among these political variables and indicate the level of “greenness” of a city. The second
political variable is the institutional form of local government, coded dichotomously; 1 for
mayor-council structure, and 0 for council-manager structure. Finally, the sociodemographic and
climate variables are cities’ household income level, education attainment, housing density,
unemployment rate, possible sunshine, and average residential electricity consumption.
Model 2 investigates the treatment effect of local solar approval processes on small-scale
residential solar PV capacity installed in cities. The dependent variables are extracted from the
Open PV Project, indicating total installed kW as well as the number of small-scale (under 10
kW) residential solar installations in a city, lagged 1 year with the solar approval process
treatment effect. The value of total installed kW by cities is converted into logarithm, for the
original data distribution is highly right-skewed. Most independent variables in Model 1 are
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included in Model 2, except for form of local government, because there is no evidence in
previous studies indicating potential associations between form of local government and the
deployment of solar PVs at the local level.

Models
In Model 1, a logit regression model is employed to identify the predictors for the adoption
of local solar approval processes. The logit model investigates the amount an independent or
control variable would increase or decrease (or have no effect) on the likelihood of the policy
adoption of interest. The author constructs a pooled cross-sectional dataset, consisting of
California cities in years 2010 and 2011. In Model 2, a two-year panel dataset is constructed.
Ordinary least squares (OLS) regression, negative binomial regression, and fixed effects models
are utilized to evaluate the effect of solar approval processes on installed solar PV capacity in the
following year. A negative binomial is deployed when dependent variables are count data that are
zero or positive integral values; in this case, one of the dependent variables is the number of solar
PV installations in a city in a particular year. To estimate the change in solar PV installations
resulting from local solar approval processes, fixed effects models are utilized to control
unobserved factors that are constant over time.
Results
Table 4 presents the results of a logit regression modeling the factors that influence the
adoption of local solar approval processes, while Table 5 presents the results of different
regressions modeling the influence of solar approval processes on local residential solar
installations. Collinearity diagnostic measures find no multicollinearity concerns in the two
models, with the mean variance inflation factor (VIF) approximated calculated as 2 for Model 1
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and 1 for Model 2.

Factors related to the adoption of local solar approval processes
As Table 4 shows, population size of cities, as expected, is positively associated with the
adoption of solar approval processes. However, city revenue per capita is found to decrease the
likelihood of local solar approval process adoption. Although the coefficient is extremely small
(nearly zero), this negative association between a city’s fiscal resources and the presence of a
local solar approval process is unexpected. This finding might have resulted from the possibility
that cities with low revenue per capita are more likely to take advantage of low-cost measures,
such as improving solar administrative reviewing procedures, to facilitate the deployment of
residential solar installations. On the other hand, cities with high revenue per capita are endowed
with more fiscal resources to utilize high-cost measures, such as subsidizing privately owned
solar panels or providing financing mechanisms for solar PV installations. Two other variables
that measure city governments’ resources potentially contributing to renewable energy
policymaking—average number of planners and ICLEI membership—are not found statistically
significant to the adoption of local solar approval processes.
Among the political variables, ownership of a municipal utility is found to be a moderate
predictor for the adoption of solar approval processes, suggesting that cities served by a
municipal utility are two times more likely to adopt solar approval processes than those do not
own municipal utilities, holding all else equal. As expected, residents’ environmental ideology is
found to be a positive predictor for the adoption of local solar approval processes, while form of
government is found not influential to the adoption of local solar approval processes. For the
control variables, a high percentage of bachelors in a city is found to increase the likelihood of
the adoption of local solar approval processes. Housing density is found to have a negative
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association with the presence of local solar approval processes, indicating low-density
communities are more likely to encourage the deployment of residential solar PVs by improving
solar reviewing processes.

Factors related to the deployment of residential solar installations
Table 5 presents the results for estimating the impact of solar approval processes on
residential solar PV installations by running OLS and negative binomial models without fixed
effects. As Model 2-1 and 2-2 show, the presence of solar approval processes increase the
number of residential small-scale solar PV installations in a city in the following year, holding all
else equal, but has no impact on total installed size of residential PV in a city. Population size is
found to increase the size and the number of solar PV installations. Ownership of a municipal
utility is found negatively associated with the size and the number of solar PV installations in
cities, reflecting the fact that only customers of IOUs were eligible to apply rebates with the
California Solar Initiatives (CSI) and thereby more incentivized to install solar PV systems than
customers served by municipal utilities. Surprisingly, residents’ environmental ideology is found
to be negatively associated with the size and number of residential solar PV installations. In other
words, residents who vote in favor of green propositions that support clean energy jobs, reduce
GHG emissions, and suppress oil consumption are found to install fewer solar installations. This
counterintuitive finding is also reported by previous research, which investigates the
effectiveness of local climate action plans in California (Millard-Ball 2012). The negative
correlation can be caused by the omission of explanatory variables, which are unobserved. For
example, solar energy ready homes may not be easily available in communities, and pre-existing
solar energy systems are not captured by two years of solar installation data. Coherent to prior
research investigating the deployment of residential solar PVs at the zip code or local level
77

(Kwan 2012; and Millard-Ball 2012), the education level of residents is found to have a positive
effect on the size and number of residential solar installations. Low-density cities are found to
have more residential solar PV installations, both in size and number. This finding is reasonable
given that residential small-scale solar PV systems are usually installed on the rooftops of single-
family houses, frequently located in low-density communities. Low-density housing also creates
less shade that could eclipse solar panels. Solar resources and residential electricity consumption
are found positively associated with the size and number of residential solar installations,
suggesting that communities with strong solar insolation and high usage of residential electricity
install more residential solar PV systems in total size and quantity.
With the utilization of fixed effects for city and year, as shown in Model 2-3, the presence
of local solar approval processes is found to increase the size of small-scale residential solar PVs.
Cities with solar approval processes increase 0.25 units in the exponentiation of expected total
kW residential solar installations, or an expected increase in total kW residential solar
installations of 28%, compared to cities without solar approval processes. On the other hand, a
city’s adoption of a solar approval process is found to approximately increase 15% of the number
of residential solar installations, compared to cities without such solar approval processes. In
Model 2, the year dummy variable is found positively associated with both the size and number
of small-scale residential solar PVs by cities across four models. This result indicates the
temporal variation in the dependent variables, suggesting the time trend that solar PV
installations had accelerated in the two years.
Discussion and conclusion
Local governments play an indispensable role in facilitating the deployment of solar energy
systems. However, while most extant literature has examined the role of federal and state
78

governments and policies in solar energy development, less research has examined their local
counterparts. By simplifying and standardizing local solar permitting processes, local
governments can potentially reduce the soft costs of rooftop solar systems and catalyze the
penetration of solar energy technologies in jurisdictions. California is a leading state in
promoting solar energy by mandating statewide distribution generation goals and offering cash
back for residential and commercial solar energy installations. Utilizing the data collected from
the California’s annual statewide planning surveys, this article examines the determinants for the
adoption of local solar approval processes and analyzes the impact of solar approval processes on
the size and number of small-scale residential solar PV installations in cities. Although the
dataset used in this analysis only consists of two year periods due to limited data availability, this
article provides an early set of quantitative evidence that explains California cities’ solar
progressiveness by adopting solar administrative approval processes. Cities with a large
population size, ownership of a municipal utility, high degree of residents’ environmental
ideology, high education attainment of residents, and low housing density are more likely to
comply with the California Solar Rights Act by adopting solar approval processes. Additionally,
the presence of local solar approval processes is found to increase both the total capacity and
number of small-scale residential solar PVs in the following year.
The findings highlight the important role of municipal utilities in driving cities’ policy efforts
to facilitate the deployment of residential solar PVs at the local level. Municipal utilities provide
city governments additional fiscal and technical resources that potentially benefit local
renewable energy policy-making (Homsy 2016). The negative association between cities’
revenue per capita and the adoption of solar approval processes implies that high fiscal resources
may not be a requirement for city governments to conduct administrative reviewing for
residential solar applications. Local governments appear to develop policies that favor solar
79

energy installations in response to high shares of pro-environmental and educated constituents in
jurisdictions. Additionally, this paper provides quantitative evidence that cities play an important
role in facilitating the deployment of residential solar installations at the local level. By removing
unreasonable barriers for rooftop solar installations and simplifying solar permitting procedures,
cities proactively create favorable environments for residential solar PV capacity to grow in their
particular territory. While this research presents an early evaluation of cities’ policy efforts to
remove unreasonable obstacles to residential solar installations, future research could investigate
cities’ decisions to design and adopt streamlined solar permitting processes and whether the use
of streamlined, standardized, and expedited permitting processes increases solar deployment in
different contexts with varying geographical, political, sociodemographic, and climate
conditions.
This paper offers important policy implications in its conclusion that local solar permitting
processes may be further simplified, standardized, and streamlined to reduce the soft costs of
solar installations. Federal, state, and local governments can cooperate to maximize the
effectiveness of policy interplay between the state and local levels on spurring solar energy
capacity. For example, federal and state governments can provide financial, technical, or
information resources to assist subordinate jurisdictions in developing ordinances and programs
that foster the deployment of solar energy systems. Future research could investigate the policy
dynamics among governmental actors at different tiers and the relative effectiveness of various
solar policy tools.

80

Appendices
Table 1 Variables Description and Source
Variables Description Source
Solar administrative approval
process (2010, 2011)
Adoption of an administrative approval process
for solar energy systems
Annual Planning Survey Results,
2012; The California Planners'
Book of Lists, 2011
Size of solar PVs (2010, 2011)
Total kW of small-scale residential solar
installations (<10 kW) in a city, lagged one year
with the solar approval process treatment effect
The Open PV Project
Number of solar PVs (2010,
2011)
Number of small-scale residential solar
installations (<10 kW) in a city, lagged one year
with the solar approval process treatment effect
The Open PV Project
Population, logged (2010,
2011)
Natural log of total population of each city U.S. Census
City revenue (2010)
Functional and generation revenues per thousand
people of a city
Cities Annual Report 2010-2011
Planners (2010) Number of planners per thousand people
Governor’s Office of Planning
and Research
ICLEI membership (2009)
A dummy variable indicating whether a city has
ICLEI membership
ICLEI
Mayor-council structure
A dummy variable indicating whether a city has a
mayor-council form (1) or a different form (0)
League of California Cities
Municipal utility
A dummy variable indicating whether a city or
county has a municipal utility as its primary
provider of electricity in the jurisdiction
California Energy Almanac
Residents' environmental
ideology
A constructed index indicating the degree of
residents' environmental ideology by city
Composed by the author
Median household income,
logged (2010)
Median household income (dollars) by city American Fact Finder
Education (2010)
Percentage of bachelor's degree or higher among
population 25 years old or above in a city
American Fact Finder
Density, logged (2010)
Average number of housing units in one square
mile in a city
U.S. Census
Unemployment rate (2010) Unemployment rate in a city American Fact Finder
Residential electricity
consumption (2010)
Residential electricity consumption per thousand
people (millions of kilowatt-hours) by county
RAND State Statistics
Possible sunshine
Percent of possible sunshine in a city. A higher
value indicates more possible sunshine. Of the
total amount of possible sunshine, this represents
the average annual amount. This measurement is
the total time that sunshine reaches the earth
expressed as the percent of the possible maximum
amount of sunshine from sunrise to sunset (with
clear sky conditions)
SimplyMap

Table 2 Descriptive Statistics
81

Pooled cross-sectional variables
Obs
(N)
Time periods
(T)
Mean Std. Dev. Min Max
Solar admin reviewing process (2010, 2011) 857 2 0.775963 0.41719 0 1
Size of solar PVs in kW (2010, 2011) 842 2 4.646434 1.437 0.27763 8.62401
Number of solar PV installations (2010, 2011) 960 2 48.34896 100.636 0 1061
Population, logged (2010, 2011) 960 1 10.12585 1.427427 4.7185 15.1486
City revenue per capita (2010) 938 1 1662.815 1604.35 316.75 18926.7
Number of planners per thousand people (2010) 960 1 0.273887 1.08104 0 17.8571
Municipal utility 960 1 0.075 0.26353 0 1
Mayor-council structure 960 1 0.302083 0.4594 0 1
ICLEI membership (2009) 960 1 0.297917 0.45758 0 1
Residents' environmental ideology 952 1 -7.65E-09 2.37208 -5.5302 5.67761
Median household income, logged (2010) 958 1 11.01636 0.40468 9.92378 12.3177
Education (2010) 960 1 0.295458 0.19833 0 0.86147
Density, logged (2010) 960 1 7.042333 0.84287 1.76326 9.47482
Unemployment rate (2010) 960 1 0.091192 0.03721 0.016 0.242
Residential electricity consumption 960 1 2.599792 0.72329 1.8 6.9
Possible sunshine 960 1 73.39583 6.15829 51 88

Table 3 Principal Components Analysis of Residents’ Environmental Ideology
Variable Year Description
Residents’
environmental ideology
(Eigenvalue=5.63)
Component 2
(Eigenvalue=1
.62)
Component 3
(Eigenvalue=0
.27)
DMT
October
2010
Percentage of registered
Democratic Party members in the
city.
0.3833 0.0768 -0.3813
Pro7Y
November
2008
Percentage of people who voted in
favor of Proposition 7, Renewable
Energy Generation, which would
require California utilities to
procure half of their power from
renewable resources by 2025.
0.1789 0.6552 0.6373
Pro10Y
November
2008
Percentage of people who voted in
favor of Proposition 10, a bond that
would facilitate the development of
alternative fuel vehicles (AFVs)
and renewable energy by promoting
ownership of AFV and funding
research on renewable energy
development and providing
incentives to consumers.
0.2242 0.6187 -0.3806
Pro84Y
November
2006
Percentage of people who voted in
favor of Proposition 84, a bond
measure for water quality, flood
control, natural resource protection
0.3928 -0.0296 -0.3446
82

and park improvements.
Pro87Y
November
2006
Percentage of people who voted in
favor of Proposition 87, Alternative
Energy Oil Tax, which would
impose a tax on oil producers to
fund energy efficiency and
alternative energy measures.
0.3787 -0.2535 0.3625
Pro39Y
November
2012
Percentage of people who voted in
favor of Proposition 39, which
would dedicate $550 million
annually for five years from
anticipated increase in revenue to
create energy efficiency and clean
energy jobs.
0.4066 -0.0474 0.1059
Pro23N
November
2010
Percentage of people who voted
against Proposition 23, Suspend Air
Pollution Control Law (AB 32).
0.3729 -0.3265 0.2053
DEM2008
November
2008
Percentage of voters who voted for
a Democrat presidential candidate
in the November 2008 general
election.
0.4108 -0.0895 -0.01

Table 4 Logit Regression Results: Local Solar Approval Process

Solar administrative approval
process
Capacity and resources
Population (log) 0.25** (0.10)
City revenue per capita -0.00** (0.00)
No. of planners per
thousand persons
0.25 (0.23)
ICLEI membership 0.01 (0.28)
Municipal utility 0.78* (0.46)
Political factors
Form of local government 0.19 (0.23)
Residents' environmental
ideology
0.14 ***(0.05)
Demographic, socioeconomic, and climatic characteristics
Median household income
(log)
0.40 (0.55)
Education 3.15*** (1.19)
Density (log) -0.37** (0.17)
Unemployment rate -2.54 (3.75)
Possible sunshine 0.02 (0.02)
83

Other
Residential electricity
consumption per thousand
persons
-0.31 (0.20)
year 0.07 (0.22)
Constant -4.80 (6.23)
Observations 561
P > χ 2 0
Pseudo r 2 0.1423

Table 5 Negative Binomial and Fixed Effects: Solar PV installations

cross-sectional models fixed effects
Model 2-1 Model 2-2 Model 2-3 Model 2-4
OLS Negative binomial OLS Negative binomial
kW (log) Number of installations kW (log) Number of installations
Solar approval process 0.04 (0.09) 0.15* (0.09) 0.25*** (0.09) 0.15** (0.07)
Population (log) 1.01*** (0.04) 0.98*** (0.03) - -
City revenue per capita 0.00 (0.00) 0.00 (0.00) - -
No. of planners per thousand
persons
0.30 (0.22) -0.07 (0.15) - -
Municipal utility -0.92*** (0.14) -0.87*** (0.14) - -
Residents' environmental
ideology
-0.16*** (0.02) -0.11*** (0.02) - -
Median household income (log) 0.13 (0.17) -0.12 (0.18) - -
Education 2.36*** (0.34) 2.40*** (0.36) - -
Density (log) -0.42*** (1.41) -0.33*** (0.06) - -
Unemployment rate 2.35* (1.41) -0.56 (1.46) - -
Possible sunshine 0.03*** (0.01) 0.02*** (0.01) - -
Residential electricity
consumption per thousand
persons
0.37*** (0.68) 0.32*** (0.08) - -
year 0.37*** (0.06) 0.25*** (0.07) 0.23*** (0.03) 0.26*** (0.03)
Constant -8.41*** (2.11) -6.68*** (2.28) 4.10*** (0.07) 2.40*** (0.14)
Observations 754 837 751 730
P > χ 2 0.00 0.00 0.00 0.00
r 2 0.6438 0.1028
84

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89

CHAPTER 3
EXAMINING THE ADOPTION AND EFFECTS OF VOLUNTARY
ENVIRONMENTAL PROGRAMS: EVIDENCE FROM U.S. CITIES

Abstract
V oluntary environmental programs (VEPs) are policy instruments that aim to generate
positive environmental externalities by inducing participants’ voluntary compliance beyond legal
requirements. While a significant large body of work has examined the use of VEPs by private
firms and facilities, very little research has examined their use in the public sector. This article
examines cities’ motivations, decision-making processes, and the effects of participating in
sustainability certifications or rating programs. By reviewing the firsthand experiences of five
U.S. cities in joining two urban sustainability certifications or rating programs, this study finds
strong evidence that cities’ participation in sustainability certifications or rating programs are, as
previous literature suggests, largely motivated by public recognition and external pressures. City
governments are also found to value the knowledge transferred from the VEPs highly, although
the results also reveal the existence of alternative knowledge-gathering mechanisms from which
cities can obtain information regarding local sustainability planning. While there is no evidence
indicating participation in VEPs improves citywide environmental performance, city
governments report gaining internal benefits, including capacity building and increased morale,
from the participation process.

Key words: voluntary environmental programs, local government, urban sustainability, ISO
14001, STAR Rating System

90

Introduction
Increasingly, cities have become important policy actors and innovators advancing
sustainable development and climate protection. Accommodating more than half of the world’s
population, cities account for two-thirds of the world’s energy consumption, and emit about 70
percent of global greenhouse gas (GHG) emissions (The World Bank 2015). While possessing
tremendous potential for climate change mitigation, cities bear the risks of severe changing
weather and rising sea levels. In response, some cities participate in voluntary environmental
programs (VEPs) to address climate change and promote local sustainability. By definition,
VEPs are policy instruments that aim to generate positive environmental externalities by
inducing participants’ voluntary compliance beyond legal requirements (Prakash and Potoski
2007). Since their emergence in the late 1980s, VEPs have become alternative measures to
promote environmental outcomes by offering greater flexibility and encouraging innovation than
conventional command and control regulations (Carmin, Darnall, and Mil-Homens 2003;
Koehler 2007). While a significant large body of work has examined the use of VEPs by private
firms and facilities, very little research has examined their use in the public sector. This article
fills this literature void by investigating the decision-making of U.S. cities participating in
sustainability certifications or rating programs, and by examining their perceived external and
internal benefits to cities.
In recent years, VEPs have become an increasingly popular method for promoting local
environmental improvement in the public sector (Hughes 2012). A large number of VEPs—
varying in size, scope, type, and form—have emerged as policy tools for local governments to
facilitate local sustainability. For example, the International Council for Local Environmental
Initiatives (ICLEI) provides technical assistance and information about various issues around
91

sustainable development to local government members (Yi, Krause, Feiock 2017); the Mayor’s
Climate Protection Agreement (MCPA) is an alliance where participating mayors pledge to
voluntarily reduce cities’ GHG emissions (Krause 2011); and the C40 Cities Climate Leadership
Group is an international network of large cities that are encouraged to share knowledge and
experiences surrounding climate protection (Lee 2013). Previous analyses have demonstrated
that cities’ decisions to participate in ICLEI, MCPA, or C40 are influenced by institutional
capacity, political environment, and demographic characteristics (Krause 2011; Lee 2013; Sharp,
Daley, and Lynch 2010; Wang 2012; and Zahran et al. 2008). However, these quantitative
studies may overlook factors that cannot be captured by numbers and may be unable to reveal the
mechanisms of how cities are motivated to participate in climate-related VEPs.
Therefore, to help fill this gap, this article draws from and contributes to the body of
literature around VEPs by examining cities’ decision-making toward the adoption of VEPs. Prior
research suggests three motivations behind organizations’ decisions to adopt VEPs: (1) public
recognition associated with the VEPs (Prakash and Potoski 2007), (2) stress by external
stakeholders (Rivera and de Leon 2004), and (3) the value of knowledge transferred from VEPs
(Videras and Alberini 2000). The author examines whether these motivations hold true for cities
by studying the experiences of five U.S. cities’ participation in two particular programs: (1) ISO
14001:2004 Environmental Management Systems, a common VEP choice for private-sector
entities, and (2) STAR Community Rating System—a recently-emerged U.S.-based
sustainability rating program that consists of city-level goals and objectives for sustainability.
These two contrasting programs allow the author to analyze cities’ motivations to join voluntary
sustainability-related programs in different contexts and to help identify the program
characteristics that especially appeal to cities.
Most extant studies that evaluate the effects of VEPs on environmental improvement have
92

focused on the private sector in various industries, including the chemical industry (Khanna and
Damon 1999; King and Lenox 2000), skiing facilities (Rivera and de Leon 2004), and industrial
firms in different countries (Potoski and Prakash 2013). However, very little research has
evaluated the consequences of VEP participation in the public sector. To fill the void in the VEP
literature, this article evaluates the environmental and non-environmental effects of participation
in ISO 14001 or STAR accrued to cities as a whole and to local governments internally.
Specifically, this paper asks: What motivates cities to participate in sustainability certifications
or rating programs? And what are the external and internal effects of participation in
sustainability certifications or rating programs to participating cities? The author explores the
questions by collecting data from semi-structured interviews with employees from city
governments, federal and regional agencies, and several urban sustainability-related programs.
Although the scope of the interviews was not limited to the following five cities, this analysis
primarily focuses on the experiences of Denver, CO, and Dallas, TX, which have participated in
ISO 14001, and Baltimore, MD, Raleigh, NC, and Cambridge, MA, which have participated in
STAR. Different from the large number of extant studies that quantitatively evaluate the
determinants and effects of VEP participation, this analysis reveals the qualitative mechanisms
of how cities are motivated to join in a program and how they perceive the effects of VEP
participation.
The results indicate strong evidence that cities’ participation in sustainability certifications
or rating programs are, as previous literature suggests, largely motivated by public recognition.
City governments are also found to value the knowledge transferred from the ISO 14001 and
STAR programs highly, although the findings also reveal the existence of alternative knowledge-
gathering mechanisms from which cities can obtain information regarding local sustainability
planning. The analysis also supports the hypothesis that cities’ participation in sustainability
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certifications or rating programs is sometimes driven by external stress, such as regulatory
pressures and peer competition. While there is limited evidence indicating participation in ISO
14001 and STAR improves citywide environmental performance, city governments report
gaining internal benefits, including capacity building and increased morale, from the
participation process. This research highlights the non-environmental benefits of VEPs that
potentially strengthen city governments’ capacity and institutions for addressing complex
sustainability issues at the local level.
In the essay that follows, the first section will provide an overview of the two sustainability
certifications or rating programs of interest: ISO 14001:2004 Environmental Management
Systems and the STAR Community Rating System. The author will then discuss the factors
influencing participation in VEPs, followed by a brief summary of the research method. After
examining cities’ motivations for participation in VEPs and the effects of participation in the
results, the conclusion will follow.
City sustainability certifications or rating programs
City sustainability certifications or rating programs emerged as a response to the increasing
need for management and policy tools to assess and develop community sustainability and
resilience (Berardi 2013). A handful of qualitative studies have compared the existing urban
sustainability certification, rating, or reporting programs, such as BREEAM for Communities,
LEED for Neighborhood Development, CASBEE for Urban Development, Quantitative
Examination System on Comprehensive Control of Urban Environment, and National Model
Cities of Environmental Protection (Berardi 2013; Francesch-Huidobro, Li, and Lang 2009; Siew
2014; and Wangel et al. 2016). Yet, to the author’s best knowledge, cities’ motivations and
decision-making processes for participating in sustainability certifications or rating programs
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have not been systematically examined.
These multi-criterion programs usually provide standardized indicators and help cities and
communities to benchmark, monitor, track, and compare their sustainability performance with
peers over time. However, these certification programs are not flawless. Some indicators
evaluate city sustainability actions rather than actual performance, meaning that communities can
be certified without being sustainable (Wangel et al. 2016). In addition, not every program audits
the accuracy of data submitted by cities and communities, thereby raising questions over
certification programs’ credibility. In some programs, social and economic dimensions of
sustainability are relatively weak and lack assessment criteria for civic engagement (Berardi
2013). Furthermore, participating cities are required to pay associated fees to join programs with
the investment in budgetary and staff resources. Some local governments may be reluctant or
incapable to make this financial and staff commitment (Srinivas and Yashiro 1999).
This research selects ISO 14001 and STAR for two reasons. First, while ISO has been
widely adopted by private organizations worldwide, only two U.S. cities have been certified by
ISO 14001 across all municipal departments. This provides researchers a unique opportunity to
understand how cities’ decision-making of participation in ISO 14001 resembles and differs from
the experiences of private organizations. Second, unlike ISO 14001 managing sustainable
development from the organization perspectives, STAR is the most prevalent voluntary rating
program in the United States that assesses and monitors cities’ sustainability actions and
performance in various aspects. The two contrast programs allow the author to analyze cities’
motivations for participation in sustainability programs in different contexts and identify the
program characteristics that especially appeal to cities. Table 1 summarizes the differences
between ISO 14001 and STAR in details.
ISO 14001 Environmental Management Systems
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Headquartered in Switzerland, the International Organization for Standardization (ISO)
develops and publishes international standards in various topics, including climate change,
health, water, and food. ISO’s general principles are Plan-Do-Check-Act, which requires
constant improvement and review. To get certified by ISO, an organization is required to comply
with comprehensive standards, collect sufficient audit evidence, pass auditing, and pay
corresponding fees. In recent years, organizations have increasingly adopted certifiable standards
on environmental management practices, including ISO 14001 Environmental Management
Systems, to enhance the accountability of sustainability (Boiral and Gendron 2011). ISO 14001
is an environmental management framework for organizations of any size, type, location, and
level of maturity to certify their operations to (1) minimize negative impacts on the environment;
(2) comply with environmental laws, regulations, and other requirements; and (3) continually
improve in the above. In other words, ISO 14001 provides a set of management and production
processes that allows organizations to integrate environmental issues into day-to-day operation.
These standards of ISO 14001 have become reference models for certifiable sustainability
management programs and serve as tools for participating organizations to control internal
sustainability practices (Boiral and Gendron 2011).
ISO 14001 is a modest stringent third-party certification program that prevents participants
from shirking environmental responsibilities (Potoski and Prakash 2005a). ISO 14001-certified
facilities are found to emit less pollution and improve regulatory compliance than
nonparticipants (Potoski and Prakash 2005b). However, the impartiality, rigor, and accountability
of ISO 14001 has been called into question. It is possible that there are discrepancies and
decoupling between the ISO auditing and the actual audit processes (Boiral and Gendron 2011).
In other words, the role of certification audits becomes symbolic, and pursuing sustainability
certifications appears to be a strategy for organizations to respond to external pressures for
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accountability.
By design, ISO 14001 is an environmental management system for organizations. However,
since its first launch in 1996, some local governments have shown interest in adopting the
program to achieve urban sustainability (UNEP 2003). In the early 2000s, the United Nations
Environment Programme published a report and a resource kit to provide information and
practical tools that help local authorities assess the potential costs and benefits of adopting the
environmental management system. As of 2005, Japan had more than 70 cities certified by ISO
14001 (Scholz 2006). A district in Municipality of Tehran, Iran, was also documented to be
certified by ISO 14001:1996 (Nouri and Toutounchian 2004). By comparison, ISO 14001 is a
unique choice of sustainability certification programs for U.S. cities. There are only two U.S.
cities where all municipal agencies are certified by ISO 14001: City of Dallas, Texas, and City of
Denver, Colorado. City of San Diego, California has several divisions and facilities that are
certified by ISO 14001, including the Public Utilities Department’s Water System Operations and
Water Construction & Maintenance divisions (City of San Diego 2015).
Sustainability Tools for Assessing and Rating System (STAR)
Based on the author’s best knowledge, Sustainability Tools for Assessing and Rating
System (STAR) is one of the only two U.S.-based community sustainability rating systems that
have emerged to evaluate and develop help communities achieve urban sustainability. While
Sustainable Jersey is a program for communities located in the State of New Jersey, the STAR
program is a national program with nearly 100 city members. Released in 2012, STAR
Communities is a national 501(c)(3) nonprofit sustainability rating program in the United States.
Since 2008, the federal government has made subsidies available for cities, and correspondingly
American cities have been setting up sustainability offices. STAR emerged after recognizing a
need for establishing universal metrics to evaluate urban sustainability in various aspects across
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the nation (Interview 16).
Consisting of seven goals and 44 objectives, the STAR metrics assess a city’s sustainability
performance with multiple dimensions and rank the city as “reporting,” or 3 stars, 4 stars, or 5
stars (see Table 2 and 3 for more details). Furthermore, the metrics incorporate national standards
such as EPA regulations and industrial standards such as LEED Building. STAR has a board of
directors, a steering committee, and a technical advisory committee that are all accessible to city
members. When the program was designed, the rating program utilized an open, consensus-based
process by recruiting volunteers from local governments, industries, and experts on such topics
as energy, economy, health, and built environment. As of April 2017, there are four American
cities ranked as 5 stars, 24 cities as 4 stars, and 3 cities as 3 stars.
Motivations for the adoption of voluntary environmental programs
What factors may affect the adoption of voluntary environmental programs (VEPs)? VEPs
aim to induce program participants to produce positive environmental externalities beyond legal
requirements (Prakash and Potoski 2012). Offering flexibility in target-setting and program
implementation, VEPs appear to be attractive policy tools for both regulators and public agencies
to promote environmental improvement (Hughes 2012). This section discusses the three primary
motivations identified in the relevant literature that drive public and private organizations to
participate in VEPs: public recognition, external stress, and the value of knowledge transferred
from VEPs.
Public recognition
One of the major motivations for organizations to join environmental programs is the public
recognition associated with VEPs (Lyon and Maxwell 2007; Potoski and Prakash 2005b; Prakash
and Potoski 2007; Videras and Alberini 2000). Scholars have characterized voluntary programs
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as clubs where participants exchange membership costs for exclusive benefits, including the
brand names of environmental clubs (Potoski and Prakash 2005b; Prakash and Potoski 2007).
Publicity and a green image associated with club membership signal to external stakeholders
about the program participants’ credibly beyond-compliance environmental performance. The
brand names of VEPs reduce information asymmetry for external stakeholders to distinguish
participants from nonparticipants based on environmental activities (Prakash and Potoski 2012).
By joining environmental certification programs, participants enjoy a degree of legitimacy and
trust that otherwise organizations alone may find difficult to acquire (Boiral and Gendron 2011).
The reputation associated with VEPs provides assurance to stakeholders and thereby
enhances the relationship of participating organizations with external stakeholders (Prakash and
Potoski 2007). For example, the acquisition of ISO 14001 signals to customers that companies
are environmentally sensitive (Potoski and Prakash 2005b). Sometimes, the news of successful
adoption of ISO 14001 are turned into favorable publicity covered by the media. Additionally,
firms that publish environmental reports are found more likely to join VEPs, suggesting the
willingness to present positive images of proactively supporting environmental quality to
customers and investors (Videras and Alberini 2000).
The reputation of VEPs depends on institutional designs and auditing mechanisms (Boiral
and Gendron 2011; and Prakash and Potoski 2007). When design allows participating entities to
easily shirk the environmental responsibility of producing positive environmental externalities,
the VEP is less reputable. Scholars found that, without mechanisms to prevent opportunism,
facilities with low-rated environmental performance are more likely to attend VEPs in exchange
for public recognition and branding publicity (Rivera and de Leon 2004). Simultaneously, by
joining VEPs without actually showing improvements to environmental performance, these
participants are at risk of being scrutinized in the name of “greenwashing” (Lyon and Maxwell
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2007). On the other hand, VEPs that have stringent requirements and monitoring mechanisms are
more likely to curb free-riding effectively, and thereby the brand name is more credible to
stakeholders. However, stringent standards and rigorous enforcement rules also deter
participation. As a modest stringent program that requires an independent verification
mechanism, ISO 14001 is found to attract companies with superior environmental performance
(Toffel 2005).

External pressures
Organizations that face institutional pressures may join VEPs for a potential gain in social
legitimacy and relief of stress from government, competition, and public opinion (Cashore and
Vertinisky 2000; and Rivera and de Leon 2004). Built on neo-institutional theory, a large number
of studies have characterized participation in VEPs as a response to external pressures (Cashore
and Vertinisky 2000; Darnall 2006; King and Lenox 2000; and Rivera and de Leon 2004). The
theory proposes that organizations respond to external institutions, norms, and values through
changes in management and practices to acquire a sense of social legitimacy. Three mechanisms
of institutional pressures are classified as coercive, mimetic, and normative to differentiate the
sources of external pressures exerted by legal rules, competitors, and industrial members
(DiMaggio and Powell 1983). Coercive pressures, usually imposed by governments and
mandates, directly impose organizations’ behavior and structure to comply with standards.
Mimetic pressures arise when organizations face uncertainty and imitate the behavior and
strategies of leading peers in the industry. Normative pressures are primarily derived from values
and norms created by professional networks and industrial associations. Empirical analyses
provide evidence that organizations join VEPs in response to federal oversight and high state
demands (Rivera and de Leon 2004), firms face higher degrees of regulatory and market
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pressures are more likely to mandate their divisions to adopt ISO 14001 (Darnall 2006), and
firms of large sizes and high-level pollution are subject to greater degrees of external pressures
and are found more likely to voluntarily participate in environmental programs (King and Lenox
2000).
Facing increased demands from citizens and nongovernmental organizations (NGOs) for
better environmental quality, local governments can be pressed to adopt innovative policy tools
that solve urban environmental issues (UNEP 2003). Simultaneously, local governments are
directly or indirectly governed by national and state governments and international agreements
on sustainable development. The political pressures from higher-tier governments can also
motivate local governments to adopt VEPs as a means to relive regulatory threats. Public
agencies assigned with specialized tasks (e.g. special district agencies) are exposed to higher
political and regulatory pressures to provide specific public goods and are found more likely to
join task-related VEPs (Hughes 2012). Additionally, urban sustainability is an abstract and
ambiguous policy goal without a consensus of definition and simple solutions. Competition
among localities may drive cities to adhere to best practices in sustainability. The standardized
metrics and frameworks of sustainability certification programs shape and reinforce the best
sustainability practices and procedures, providing a sense of normative legitimacy to participants
(Boiral and Gendron 2011).

Knowledge transferred from environmental programs
Technical assistance and information subsidies that are exclusively offered to VEP
participants are another motivation for participation. Lyon and Maxwell (2007) argued that some
VEPs, usually sponsored by governments, are best viewed as information diffusion programs.
However, there is little empirical research investigating the role of information in organizations’
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decision to join VEPs. In an evaluation of VEPs administered by the U.S. Environmental
Protection Agency (EPA), Videras and Alberini (2000) suggested that participating firms
appeared to appreciate the value of information and technology transferred from the VEPs. In
another empirical study, Blackman, Afsah, and Ratunanda (2004) found that improving the
knowledge of factory managers about plant-level emissions and abatement opportunities was the
most important factor to result in participating plants’ pollution abatement in a publicly disclosed
information program. Especially, low environmental performers improved the most significantly
in environmental performance after participating in the program. The finding suggests that low-
rated organizations in environmental performance may have greater incentives to join VEPs in
exchange for valuable information about environmentally friendly practices.
The scale and complexity of urban economic and environmental activities increase the
difficulties in assessing and promoting urban sustainability (Berardi 2013). An urban
environment poses a challenge to policy makers and practitioners for balancing natural and built
environments with ecological, economic, and social objectives (UNEP 2003). VEPs help
participating cities govern urban sustainability by codifying the knowledge of leading examples
and specifying best practices in frameworks and metrics (Lyon and Maxwell 2007). For example,
sustainability certifications or rating programs provide comprehensive standardized metrics and
systematic approaches that can help cities develop local sustainability strategies and monitor
policy progress. ISO 14001 provides detailed environmental management guidelines that city
managers and policy makers can use to develop sustainability strategies that respond to local
social, economic, and environmental challenges (UNEP 2003). STAR provides a set of goals and
objectives that have evolved over time to reflect the most pressing policy needs that U.S. cities
face in urban sustainability governance.
Peer-to-peer information sharing is another common benefit that VEPs provide to
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participants, passing along knowledge and promoting information exchange. Specifically,
ongoing face-to-face interaction permits individuals to cultivate relationships, as well as to allow
deep conversation about how one’s successful experience can be applied to another
organization’s operational and cultural setting (Lyon and Maxwell 2007). STAR organizes
trainings and workshops for city members to learn about the best practices in urban
sustainability. Members also have access to technical experts and staff advisor, whom they can
consult.
Effects of participation in voluntary environmental programs
Although VEPs are widely characterized as policy tools that encourage participants’
beyond-compliance environmental performance, prior research has demonstrated that
participation in VEPs does not guarantee improvement in environmental performance both in the
private (Darnall and Sides 2008; Rivera and de Leon 2004; and 2006) and public sectors
(Hughes 2012). From self-organizing industrial programs to public environmental voluntary
programs, their effectiveness on participants’ environmental performance vary widely (Antweiler
and Harrison 2007; Darnall and Sides 2008; Hughes 2012; Lyon and Maxwell 2007; and Rivera
and de Leon 2004). In an evaluation of California’s municipal voluntary participation in urban
water conservation, Hughes (2012) found that participating public agencies did not have lower
per capita water usage than nonparticipants. By contrast, in another study investigating the
effectiveness of VEPs in the public sector, Scholz (2006) found Japanese cities that joined ICLEI
had lower industrial carbon dioxide emissions, holding all else equal.
Without sanctions, VEPs are likely to enable opportunism—participants join VEPs without
actually producing positive environmental externalities (King and Lenox 2000). Among the
numerous VEPs, ISO 14001 appears to demonstrate relative effectiveness on reducing
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participating facilities’ pollution emissions (Koehler 2007; Potoski and Prakash 2005a; and
Potoski and Prakash 2013). Unlike ISO 14001, which requires third-party auditing, STAR
verifies cities’ submitted measures internally based on its Technical Guide (STAR 2017a).
Theoretically, the lenient auditing of STAR along with the weak monitoring rules render high
risks of shirking and low social externalities (Prakash and Potoski 2007). Additionally, the design
of alternative paths for point accumulation in the STAR metrics creates an opportunity for city
members to be rewarded with high scores without actual environmental outcomes. By design,
participating cities accumulate points by either achieving community-level environmental
outcomes or implementing local actions of the specified objectives. The intention is to encourage
cities with inferior environmental outcomes or lack of resources for effective measures to initiate
actions that would mobilize long-term environmental improvement. However, with this design,
members can be awarded with high sustainability ratings by implementing extensive local
actions without achieving citywide environmental standards. For instance, in the objective of
outdoor air quality, cities can obtain a full of 15 points by achieving EPA air quality attainment
for all measured criteria pollutions, or up to 10.5 points by taking various actions, including
adopting advanced parking strategies and educating the public about actionable pollution
reduction strategies and the impacts of poor air quality on human health (detailed information
about achieving points can be found in the STAR Community Rating System). It is possible that
cities may suffer from unattained air quality, despite implementing all actions and receiving a
fairly high score of 10.5 points in this objective.
A self-selection bias can also hinder the ability of VEPs to yield positive environmental
externalities (Prakash and Potoski 2012). When VEPs attract high environmental performers to
join clubs, the participation does not result in actual environmental improvement (Prakash and
Potoski 2007). In this circumstance, participation in a VEP simply adds value—a brand name—
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to existing strategies of organizations (Koehler 2007).
In addition to yielding positive environmental externalities, some scholars have argued that
VEPs generate non-environmental benefits to participants and nonparticipants (Lyon and
Maxwell 2007; and Srinivas and Yashiro 1999). In the few studies that examine the benefits of
VEPs to city members, Srinivas and Yashiro (1999) documented external benefits—accrued to
the city as a whole—and internal benefits—accrued to local governments—that were acquired by
ISO 14001-certified Japanese cities. One of the reported external benefits of the ISO acquisition
is to demonstrate a city’s “green face” to residents and provide evidence to community
stakeholders that environmentally harmful practices in the process of municipal service delivery
are being mitigated. The acquisition of ISO 14001 also signals to stakeholders that greater
environmental actions are encouraged at the local level.
Knowledge diffusion and technology transfer to nonparticipants are other external benefits
of adopting VEPs (Lyon and Maxwell 2007). These positive non-environmental externalities
provided by sustainability certifications or rating programs can potentially facilitate the
replication of successful sustainability practices to nonparticipating cities, regional governments,
and private organizations (UNEP 2003).
Potential internal benefits resulting from participation in VEPs include cost-savings, morale
boost, and capacity building. Particularly, ISO 14001-certified cities incorporate the
environmental management system into local governments’ daily operation and long-term
institutions. These cities may improve their employees’ understanding about the interaction
between the delivery of urban services and the natural environment. Consequently, certified
cities report a substantial savings in resources and costs in daily operation and an increase in
service delivery efficiency by creating a cycle of ongoing review and improvement (Srinivas and
Yashiro 1999). Furthermore, participation in VEPs is found to increase employees’ morale by
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highlighting individuals’ efforts toward environmental improvement (Lyon and Maxwell 2007).
For example, city staff report a sense of contribution to “save the earth” in the process of
adopting ISO 14001 certifications for local governments (Srinivas and Yashiro 1999, p. 7).
Simultaneously, organizations can potentially benefit from institutional learning and the
development of corporate norms of environmentally friendly practices by joining VEPs (Koehler
2007). During the process of comprehensive data collection from various local governments’
activities, as is one of the requirements for ISO 14001 certification, cities develop more efficient
and effective internal information management systems (Srinivas and Yashiro 1999). Utilizing
the environmental management system also allows city governments to identify issues of
environmental concern, to prioritize policy objectives in service delivery, and to allocate
resources accordingly. Additionally, prior research has demonstrated the propensity of certifying
organizations to participate in other related programs because of the similar capacity that is
required. For instance, facilities that have adopted the ISO 9000 quality management standard
are found more likely to adopt ISO 14001 (King, Lenox, and Terlaak 2005).
Methods
Five treatment cities were selected in this study to identify the key factors that influence
cities’ adoption and effects of sustainability certifications or rating programs. These five cities
were selected because of varying population sizes, ranging from 105,000 residents to 1.3 million,
in addition to being responsive to the interview requests. City of Denver, CO, and City of Dallas,
TX are the only two U.S. cities where all municipal departments are certified by the ISO 14001.
Meanwhile, City of Baltimore, MD, and City of Raleigh, NC are certified by STAR, respectively,
with 5 stars and 4 stars. City of Cambridge, MA had been in the process of preparing a rating
submission to STAR at the time of being interviewed and were awarded a 5-star rating seven
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months later. Table 4 provides the information of the five targeted cities, including participation
dates and the adopted programs.
To reveal cities’ decision-making of participating in sustainability certifications or rating
programs, the data and information used in this study were mainly collected from semi-
structured interviews and complemented with literature, webpages, and other publicly available
data. In July and August 2015, I along with a team of researchers interviewed employees in city
governments, federal and regional agencies, and urban sustainability-related VEPs (see Table 5
for the list of interviews). To gain full insights from different perspectives, the interview
locations were not limited to the five cities. We also interviewed several cities without ISO
14001 or STAR participation, as counterfactual baselines to compare their sustainability
decision-making with the treatment cities. These interviews usually lasted for one hour, either in
person or by phone, sometimes one-on-one and sometimes in groups of up to five participants.
To offer time for preparation, subjects received interview questions prior to the session. We were
mostly interested in learning the reasons for cities’ participation in VEPs, especially ISO 14001
and STAR. We also inquired about the cities’ criteria for choosing a program over than others,
the capacity required in adoption, and the observed effects of participation.
The qualitative research method has the advantage to reveal the mechanism of how cities
are motivated to join ISO 14001 or STAR. Our method, however, does have a small sample size
of cities. Also, it might encounter a self-selection problem, as only cities with high
environmental performance or a high rating were willing to be interviewed. It is also likely that
interviewed city employees emphasize positive experiences disproportionately without fully
disclosing the obstacles or shortcomings for participation in the two programs.
Results
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Examining the factors that influence cities’ participation
In this section, the author examines whether public recognition, external pressures, and
knowledge are influential factors to cities’ decision of joining ISO 14001 or STAR.
Public recognition
Supporting prior research indicating that public recognition is a major motivation for
participation in VEPs, we found strong evidence that indicates cities’ participation in
sustainability certifications or rating programs are largely motivated by publicity. All the city
employees who were interviewed remarked that the acquisition of ISO certifications or a high
STAR rating helps cities establish national recognition and reputation for local sustainable
development. The accreditation appears to be especially meaningful to cities that were not
originally well-known for sustainability practices or superior local environmental quality
nationally and internationally. City employees reported that, without big names, a mid-size city
like them, were motivated to seek national recognition and establish reputation in the arenas of
local sustainability (Interview 1). Interviewees in another city believed that joining STAR and
receiving a high rating of sustainability from the program highlighted cities’ strong sustainability
performance and brought national fame (Interview 4). In another city, employees noted that after
the city received a high STAR rating, more visitors came to the city government to learn about its
successful sustainability practices and experience (Interview 5). With a simple online search, we
found that the news about cities’ acquisition of ISO 14001 or STAR were published on cities’
websites and/or local newspapers, describing cities’ certified efforts as “high marks,”
“prestigious rating,” or “internationally recognized.”
Additionally, our findings suggest that cities utilize the public recognition associated with
VEPs as a tool to communicate with external stakeholders. Supporting the theoretical claim that
brand names of VEPs reduce information costs for stakeholders to assess cities’ unobservable
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environmental performances (Prakash and Potoski 2007), the interviews with staff of city and
regional agencies suggested that municipalities tended to sell the acquisition of citywide ISO
certifications as a warranty of a safe and healthy environment to attract businesses and
investment (Interview 1, Interview 2, and Interview 11). The use of STAR metrics was reported
to help city governments portray citywide sustainability performance, compared to national
standards, and convey the evidence-based environmental assessment to citizens and stakeholders
(Interview 6).
Previous studies have demonstrated that VEPs with lenient requirements and lax
verification mechanisms are likely to attract facilities with low environmental performance to
join in exchange of public recognition. On the other hand, VEPs with independent verification
mechanisms that better prevent opportunism attract organizations with superior environmental
performance to join (Rivera and de Leon 2004; and Toffel 2005). In our analysis, we found that
STAR, a lenient program that verifies participants’ data submission internally without mandating
third-party auditing, appears not only to attract cities with lagging environmental outcomes, but
also cities with superior environmental outcomes. For example, City of Seattle, WA, often named
as one of the most sustainable cities in the United States in many reports, joined STAR in 2012
and received a 5-star rating in 2014. In one of the interviews (Interview 6), city staff explained
that the city government was confident it would earn a 5-star rating and thereby decided to join
the program. A self-assessment before the participation had revealed that some city departments
had already met or exceeded the STAR requirements. Meanwhile, city staff believed the city
government was equipped with high institutional capacity and strong political support from the
mayor to collect required data and complete the rating procedure. As a result, the city received a
5-star sustainability rating from STAR. These examples illustrate the scenario that green,
resourceful cities may not be motivated to seek sustainability certifications or join rating
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programs with the intention to improve environmental outcomes, but rather to acquire public
recognition.
On the other hand, cities with low environmental performance (e.g. non-attainment in air
quality) may take advantage of the lenient program design of STAR by implementing extensive
policy actions to score high points in the assessment without providing superior environmental
outcomes (Interview 15). We observed that city staff were aware of opportunism and decoupling
for high STAR ratings—joining sustainability certifications or rating programs without actual
environmental improvement. City employees emphasized that the highest STAR rating
demonstrated that the city already led ahead others in environmental outcomes, while informants
admitted government could do more to further improve local sustainability (Interview 5).

External pressures
Neo-institutional theory suggests that organizations’ participation in VEPs is driven by
institutional pressures from higher authorities, competitors, and environmental uncertainty.
Adherently, our interviews found modest evidence that city governments respond to external
stress by joining ISO 14001 or STAR. Among all targeted cities, City of Dallas is a unique case,
mandated by the Department of Justice (DOJ) in 2006 to prepare an environmental management
program for 12 city-operated facilities due to significant amounts of pollution that city
stormwater sewers had emitted into local rivers, lakes, and streams (DOJ 2006). The DOJ’s
coercive pressure ultimately resulted in the extensive adoption of ISO 14001 across city
departments. In 2008, all city departments had achieved ISO certification for the first time. At the
time of being interviewed in 2015, the city was in the process of voluntarily pursuing the forth-
time citywide ISO 14001 certification.
Additionally, participation in ISO 14001 and STAR appears to benefit cities by relieving
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future regulatory pressure (Darnall 2006). ISO 14001 requires certifying organizations to comply
with environmental laws and regulations, whereas the STAR program incorporates federal
regulations, industrial standards, and local institutions in its frameworks. This U.S.-based
program provides metrics with which participating STAR cities aligned institutions and strategic
sustainability plans (Cambridge and Raleigh). Otherwise, participation in international VEPs
may require cities to invest in additional efforts to ensure compliance with U.S. environmental
regulations (Interview 6).
National competition appears to be another pressure driving cities’ decisions for
participation. City staff expressed appreciation for knowing how the cities perform in various
aspects of sustainability nationally, informed by STAR’s assessment metrics (Interview 4 and 6).
The assessment results were used to identify the national rankings of individual environmental
outcomes or actions and help city governments prioritize strategies. Administrators of voluntary
programs reported that competitive pressure from peers of similar sizes and sociodemographic
and geographical conditions is especially significant in fueling cities’ sustainability planning and
practices (Interview 15 and 25). Superior sustainability outcomes or strategies implemented in
metropolises, such as New York City, may not strongly motivate mid-size cities to imitate
because the sustainability performance and institutional capacity of two differently sized districts
are not easily comparable (Interview 4).

Knowledge transferred from VEPs
We found strong evidence that the third motivation—knowledge transferred from VEPs—
drives cities’ decisions to participate in ISO 14001 and STAR. With membership of ISO 14001
or STAR, cities can access comprehensive guidelines, training and workshops, networks of
professionals offered by the programs, and the contacts of members from other city governments.
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Participation in the STAR program was described in an interview as an eye-opening experience,
showing the city team the construct of urban sustainability (Interview 5). The interviewed staffer
found the program was particularly helpful in involving communities and stakeholders in
planning processes. An interviewee from another city remarked that the city was informed by the
STAR metrics; the comprehensive evaluation of local sustainability performance in every aspect
helps the city government set policy priorities accordingly (Interview 4). Another city planner
described that the framework provides “baselines,” “stop and check point(s),” and “reflective
tools,” for urban sustainability planning (Interview 6).
In addition to program guidelines and frameworks, city members also confirmed the value
of consultancy and technical assistance provided by the personnel and advisors of the STAR
program (Interview 4, 5, and 6). It appears that STAR staff had been actively involved in the
process of preparing data submissions to help cities understand the required goals and objectives
and identify solutions for specific policy problems. Additionally, city staff seemed to appreciate
the knowledge contributed by the technical advisory group, whose members come from different
backgrounds and disciplines, including representatives from leading cities and environmental
NGOs. Participants also have opportunities to learn from other cities about their successful
projects and the barriers they had encountered in implementation.
On the other hand, interview subjects highlighted that valuable information transferred from
ISO 14001 fell on cost-savings in city operation (Interview 1 and 3). The environmental
management systems help city governments identify opportunities of upgrading to energy
efficient equipment and implementing energy saving measures. City staff described ISO 14001
as a risk preventive tool that improves city governments’ operation efficiency and material
management by saving energy, conserving water, and reducing waste consumption. The
112

expensive certification fee can be recouped through these saved costs in municipal operation and
spare the opportunity costs of hiring other consultants.
However, from interviews with nonparticipating cities, environmental NGOs, and other
VEP sponsors, we found alternative knowledge-gathering mechanisms from which cities can
obtain information regarding local sustainability planning. For example, cities can rely on civic
engagement and local knowledge (e.g. Boston) to design strategic sustainability plans. By
meeting with local leaders and environmental groups and implementing outreach programs, city
governments evaluate the environmental performance and vulnerability of each neighborhood to
build the consensus of a common community sustainability goal as well as recognize policy
priorities and timelines for different enclaves (Interview 7, 8, and 10). Several interviewees
suggested other information channels that were used to inform cities’ sustainability planning
decisions include national and state-level environmental regulations (Interview 10), regional
experience (Interview 10), judicial ruling (Interview 10), national and international research
reports (Interview 7 and 27), and city data analyses conducted by nearby universities (Interview
7).

Examining effects of participation
Despite that VEPs commonly aim to encourage participants’ beyond-compliance
environmental performance, we found limited evidence indicating that participation in ISO
14001 or STAR improves citywide environmental performance. In interviews, several staff from
different city and regional agencies were aware that the acquisition of certifications or high
ratings of sustainability might not warrant citywide environmental performance improvement
(Interview 5 and 11). Although ISO 14001-certified cities can provide quantitative evidence of
environmental benefits that are attributed to improved efficiency in public agencies’ day-to-day
113

operation, to what extent participation in ISO 14001 improves citywide environmental
performance is unclear. An example of quantitative evidence of how ISO 14001 measures
improve environmental outcomes in municipal activities was the saved amount of carbon
emissions due to alternative commutes. Due to the requirement of ISO 14001 asking city
employees to log their daily commutes, the Dallas government was able to claim that 2.5 million
miles of commutes and 1,207 tons of carbon dioxide emissions were saved by encouraging
employees to carpool and use public transit in a year (City of Dallas 2014; and Interview 1).
Other environmental benefits that are supported by numerical evidence include continuous
declines in water usage per capita over years, number of recycled waste and electronics, and
increased utilization of alternative fuel vehicles in the city fleet (City of Dallas 2014; and DIA
2013). However, whether accredited cities have superior citywide environmental outcomes than
nonparticipating cities is unknown.
It is difficult to examine the effect of STAR membership on citywide environmental
performance. The cities had only joined STAR for several months at the time of being
interviewed. Given such a short participation history, the casual relationship between STAR
membership and citywide environmental quality improvement is unclear. However, the lenient
rating standards of STAR partially credit city members’ sustainability actions without actual
environmental outcomes. This program design brings its ability to yield positive environmental
externalities into question.
Additionally, the nature of community sustainability planning makes it difficult to assess
whether joining a voluntary program has achieved its ends (Millard-Ball 2012). Some policy
actions required by STAR, such as creating outreach programs about natural resources
protection, public health issues, or climate change mitigation, are difficult to quantify as impacts
on environmental changes in nature (more examples can be found in STAR Community Rating
114

System). While some policy goals can be quantitatively tracked over time (e.g. emissions
reduction targets), the implementation timelines usually target a lengthy timespan of 10 to 20
years or more. Additionally, some policy problems are beyond the control of local governments.
For example, transportation planning and air quality management rely on regional collaboration
to mitigate local congestion and air pollution problems effectively. This regional complexity
makes it difficult to ascertain the environmental effects of participation in sustainability
certifications or rating programs on local sustainability performance.
Non-environmental benefits resulted from participation in ISO 14001 and STAR were also
reported by staff in participating cities. Cities seem to acquire publicity and green images
associated with the name of clubs, although the strength of the green images is questionable.
When asked about whether the ISO 14001 certification increases the city’s reputation, one city
staffer admitted that it was hard to tell if there was a gain in reputation associated with the
certifications (Interview 3). However, the green image had been used to signal to businesses
(Interview 1, 3, and 11) and prospective residents (Interview 4) that the cities were
environmentally aware and encouraged environmentally friendly practices in the private sector.
Another potential non-environmental external benefit of participation in VEPs is knowledge
diffusion and technology transfer to nonparticipants (Lyon and Maxwell 2007). We found a
similar positive externality is likely to be induced by participation in STAR and ISO 14001. A
sustainability city staffer reported, after receiving the highest sustainability rating from STAR,
more visitors came to learn about the city’s successful sustainability planning and practices
(Interview 5). The knowledge diffusion can also occur within city governments. In Denver’s
experience of pursuing citywide ISO 14001, the adoption of ISO 14001 started with the Denver
International Airport. Its successful experience diffused to other city departments and triggered
interagency mutual learning and resource sharing (Interview 3).
115

We found strong evidence that participation in sustainability certifications or rating
programs yields internal benefits, including capacity building and increased morale, to
participating cities. In order to become certified, city governments build capacity in
communication, policy design and implementation, and information disclosure in the process of
meeting all program requirements. Widely reported by employees in different cities, the
framework of ISO 14001 or STAR served as a tool for city sustainability teams to communicate
with other agencies, mayors and council members, and external stakeholders (Interview 1, 3, 4,
5, and 6). Because getting a citywide certification or rating requires every department’s
contribution to meet the multifaceted program requirements, the certification or rating process
stimulates interagency coordination and helps individual agencies to identify possible solutions
for improvement. City employees described the adoption of ISO 14001 or STAR as “bringing
every department on board” and “buy-in” (Interview 3 and 6). City employees also reported that
metrics and assessment provided quantitative evidence when communicating to mayors and city
councils about the implementation of sustainability actions.
As part of the acquisition process, data collection from various departments also enhances
cities’ internal information management systems. Given the complexity of municipal activities, it
is not uncommon that city governments do not have full knowledge of data ownership by
agencies (Interview 15). Locating and collecting data from various agencies and activities
requires the devotion of full-time staff who are knowledgeable about the city’s operation and
associated data output (Interview 6). It also takes a good relationship to ask colleagues to take
additional time to submit data beyond their daily duties (Interview 4). While collecting data
improves city employees’ knowledge of data location, the use of quantitative metrics helps local
governments monitor and track cities’ sustainability performance over time.
Consistent with prior research (Lyon and Maxwell 2007), we found that receiving ISO
116

14001 certifications or a high STAR rating increased city employees’ morale. The successful
acquisition of ISO 14001 or high STAR rating itself was an encouraging achievement to both
local political leaders and city staff. Before the adoption of sustainability certifications or rating
programs, it is important to bring every department on board for successful adoption (Interview 3
and 4). The detailed metrics break down cities’ sustainability performance into actable objectives
and thereby prevent finger-pointing and built interagency support for subsequent sustainability
planning (Interview 4). Because the standardized requirements of ISO 14001 and STAR are
comprehensive and multifaceted, every department felt they were contributing to helping the city
achieve certification or a high rating (Interview 3 and 4).
In addition, we observed that participation in sustainability certifications or rating programs
causes an enduring effect that shapes municipalities’ institutions and culture, which makes cities’
recertification more likely. We found that this phenomenon is coherent to the path dependency
theory, which suggests that the sequence and timing of past events is influential in deciding
future events. Once particular actions are introduced, the course is very difficult to be reversed
due to increasing returns (North 1990; and Pierson 2000). By adopting the frameworks of ISO
14001 or STAR, cities may improve efficiency and overcome the obstacles in prior urban
planning and management systems (UNEP 2003). City governments implement sustainability
policies and actions as required by the chosen programs and become “locked in” and unlikely to
change to other trajectories. For instance, the Sustainability Plan of Dallas, written after the city
was first certified by the ISO 14001 in 2008, was organized consistently with the ISO 14001
guidelines by including a section in materials management and another in water and energy
management. Similarly, cities used STAR metrics as a reference to update climate action plans or
strategic sustainability plans (Cambridge and Baltimore). In interviews, we found that
participating cities were inclined to seek recertification of ISO 14001 or pursue higher scores in
117

STAR metrics (Interview 1, 4, and 5). After the first ISO 14001 certifications, Dallas and Denver
voluntarily pursued the second and third certifications, and expressed no intention to participate
in STAR. Ranked respectively with 5 and 4 stars by STAR, employees of Baltimore and Raleigh
commented that the governments would continue to improve underperformed objectives of
STAR metrics for higher scores (Interview 4 and 5).
City staff reported that ISO 14001 increased employees’ environmental awareness and
caused a “culture shift” within the government (Interview 1), which also contributes to the
enduring effect of participation. During the process of the certification acquisition, city
employees became more environmentally conscious and understood the environmental impacts
of policies, particularly due to continuous training and education. Because ISO 14001 requires
every new city employee to learn about environmental management systems, environmental
practices and awareness can be passed down to individuals and cultivate norms and values in city
governments (Interview 1).
Conclusion
What motivates cities to participate in sustainability certifications or rating programs? What
are the environmental and non-environmental effects of joining sustainability certifications or
rating programs? While a significant large body of work has examined the use of VEPs by
private firms and facilities, very little research has examined their use in the public sector. This
essay seeks to answer these questions by examining whether cities are driven by the three widely
believed factors that motivate organizations to participate in environmental voluntary programs
(VEPs): public recognition, external pressures, and the value of knowledge transferred from
VEPs to participants. This study contributes to the urban sustainability policy literature as well as
the environmental voluntary program literature by providing the firsthand documentation of U.S.
118

cities’ experiences in adopting two particular programs: ISO 14001 Environmental Management
Systems and Sustainability Tools for Assessing and Rating System (STAR). As summarized in
Table 6, the results indicate strong evidence that cities’ participation in sustainability
certifications or rating programs are, as previous literature suggests, largely motivated by public
recognition. City governments are also found to value the knowledge transferred from the ISO
14001 and STAR programs highly. However, based on counterfactual cases (e.g. New York City
and other city-targeted VEPs), information regarding local sustainability planning can be
gathered from other entities, such as research reports or regional experience. The analysis also
confirms that cities’ participation in sustainability certifications or rating programs is sometimes
driven by external pressures, such as mandates and peer competition. While the author found
limited evidence that participation in ISO 14001 or STAR results in citywide environmental
performance improvement, city governments reported gaining non-environmental internal
benefits, including capacity building and increased morale, from the participation process. While
employees of ISO-accredited cities suggested that environmental management systems saved
costs in cities' daily operation, STAR-ranked cities use the program framework as a reference to
update strategic sustainability plans. Both ISO 14001 and STAR programs generate an enduring
effect that shapes internal culture and institutions. Once a city adopts a sustainability certification
or rating program and sets up corresponding institutions, it is very difficult to reverse the
increased returns of participating in the program (Pierson 2000). The effect of path dependency
keeps cities within the same certification or rating program rather than converting to another.
This research highlights the non-environmental benefits of VEPs that potentially strengthen
city governments’ capacity and institutions for addressing complex sustainability issues at the
local level. Although the effectiveness of VEPs on citywide environmental outcomes is in
question, the value of VEPs should not be overly undermined. By providing a template for goals
119

and actions, the adoption of ISO 14001 and STAR potentially stimulates interagency
coordination, informs evidence-based sustainability planning, strengthens stakeholder
communication, starts long-term tracking, and cultivates environmentally friendly culture. These
non-environmental benefits of VEPs can accelerate the transition toward sustainable cities and
create institutions that cause enduring effects to sustain urban sustainability.
While little research has examined the role of information in the use of VEPs, this article
fills this gap by confirming the value of knowledge and information provided by ISO 14001 or
STAR that greatly motivates cities’ participation and aids local sustainability planning. However,
by interviewing the approximate counterfactual—the “without” cases of New York City, Boston,
and San Diego—the author identified alternative knowledge-gathering mechanisms that inform
local sustainability planning. Perhaps, knowledge regarding sustainability planning is the most
crucial factor for citywide strategic sustainability planning, regardless of VEP membership. This
finding leads to the policy implication that the value of knowledge diffusion and technology
transfer should be highlighted in designing and implementing various types of VEPs. As Lyon
and Maxwell (2007) argue, we found that the value of knowledge should be included as part of
the estimated effects of VEPs even it does not directly produce positive environmental
externalities. Alternatively, if supply of information is a key factor that enhances local
sustainability planning, it is open to question whether VEPs are the best mechanism for this to
occur. As informants suggested, guidance from higher-tier governmental agencies and publicly
available science reports may be low-cost measures for local agencies to obtain helpful
information.
Although the sample size is small, this article provides an early analysis of cities’ adoption
of sustainability certifications or rating programs, as well as the external and internal effects to
participating cities. A long-term evaluation of external and internal benefits from participation in
120

VEPs is beyond the scope of this article and could be further investigated by future research. For
example, does participation in VEPs affect citywide environmental performance, and how? How
does the participation influence the relationship between city governments and stakeholders?
Future research could also look into how the types and designs of city sustainability programs
impact participation in different contexts. For example, what are the most effective or efficient
designs of programs for knowledge and technology transfer to participants? How can city
governments respond to different types of VEPs or alternative knowledge-gathering mechanisms
to supplement information for local sustainability planning? Answering these questions will
enhance the understanding of policy makers and practitioners about the design and impact of
VEPs.

121

Appendices
Table 1 The Differences between ISO 14001 and STAR
ISO 14001 STAR
Organization type Switzerland-based corporate U.S.-based nonprofit
Scope International National
Start year 1996 2012
Certification/rating Pass-or-fail Reporting, 3 star, 4 star, 5 star (the
highest)
Focus Municipal operation and
environmental management
Community sustainability goals and
actions
Program design Private in-house design Stakeholder involvement and
consensus-based design process
Auditing Mandated third-party auditing Verified by STAR
Certified period 3 years 4 years
Number of U.S. city members as of
2015
2 (Dallas, Denver) Nearly 100

Table 2 Weighting of Seven Goal Areas in STAR Community Rating System
Goal
Built
Environment
Climate &
Energy
Economy &
Jobs
Education,
Arts &
Community
Equity &
Empowerment
Health &
Safety
Natural
Systems
Innovation
and Process
Total
Objectives
BE-1: Ambient
Noise & Light
CE-1:
Climate
Adaptation
EJ-1:
Business
Retention &
Development
EAC-1:
Arts &
Culture
EE-1: Civic
Engagement
HS-1: Active
Living
NS-1: Green
Infrastructure
IP-1: Best
Practices &
Processes

BE-2:
Community
Water Systems
CE-2:
Greenhouse
Gas
Mitigation
EJ-2: Green
Market
Development
EAC-2:
Community
Cohesion
EE-2: Civil &
Human Rights
HS-2:
Community
Health
NS-2:
Biodiversity
& Invasive
Species
IP-2:
Exemplary
Performance
BE-3: Compact
& Complete
Communities
CE-3:
Greening the
Energy
Supply
EJ-3: Local
Economy
EAC-3:
Educational
Opportunity
&
Attainment
EE-3:
Environmental
Justice
HS-3:
Emergency
Management
& Response
NS-3:
Natural
Resource
Protection
IP-3: Local
Innovation
BE-4: Housing
Affordability
CE-4:
Energy
Efficiency
EJ-4: Quality
Jobs &
Living
Wages
EAC-4:
Historic
Preservation
EE-4:
Equitable
Services &
Access
HS-4: Food
Access &
Nutrition
NS-4:
Outdoor Air
Quality
IP-4: Good
Governance
BE-5: Infill &
Redevelopment
CE-5: Water
Efficiency
EJ-5:
Targeted
EAC-5:
Social &
EE-5: Human
Services
HS-5: Health
Systems
NS-5: Water
in the
Environment

122

Industry
Development
Cultural
Diversity
BE-6: Public
Parkland
CE-6: Local
Government
GHG &
Resource
Footprint
EJ-6:
Workforce
Readiness
EAC-6:
Aging in the
Community
EE-6: Poverty
Prevention &
Alleviation
HS-6:
Hazard
Mitigation
NS-6:
Working
Lands

BE-7:
Transportation
Choices
CE-7: Waste
Minimization

HS-7: Safe
Communities

Points
Available
100 100 100 70 100 100 100 50 720
Source: STAR (2015).

Table 3 STAR Rating Levels and Number of STAR Certified Communities
Rating levels Point range Number of U.S.
communities*
5-star 600+ 4
4-star 400-599 24
3-star 200-399 29
Reporting communities <200 N/A
Source: STAR Community Rating System (2015) and the STAR website (STAR 2017b)
*As of April 3, 2017

Table 4 Information of Five Targeted Cities
Programs ISO 14001 STAR Community Rating System
City name Dallas, TX Denver, CO Raleigh, NC Baltimore, MD Cambridge, MA
First
certified/ranked
2008 2010 March 9, 2015 April 12, 2015 April 21, 2016
Participations
results
All city agencies were certified by
ISO 14001
4 stars 5 stars 5 stars
Population 1.26 million 650 thousands 432 thousands 621 thousands 105 thousands
Type Council-
manager
Mayor-council;
consolidated city
and county
government
Council- manager Mayor-council Council- manager
Leading agency Office of
Environmental
Quality
Environmental
Management &
Operations
Section
Office of
Sustainability
Office of
Sustainability
Community
Development
Department

Table 5 List of Interviews
123

Number Organization types Role Interview Location Number of
Interviewees
1 City of Dallas City staff Dallas 5
2 Federal funded local agency in
Denver
Housing staff Denver 2
3 City & County of Denver City staff Denver 4
4 City of Raleigh City staff Raleigh 3
5 City of Baltimore City staff Baltimore 2
6 City of Cambridge City staff Cambridge 4
7 City of Boston City staff Boston 1
8 New York City City staff New York City 1
9 New York City Transportation staff New York City 1
10 City of San Diego City staff San Diego 1
11 Texas regional agency Regional agency staff Dallas 1
12 California regional agency Regional agency staff Los Angeles 1
13 EPA Regional Office 6 EPA staff Dallas 3
14 EPA Regional Office 8 EPA staff Denver 3
15 STAR (Sustainable Tools for
Assessing & Rating Communities)
Program administrator Washington D.C. 1
16 Urban sustainability certification
program
Program administrator Telephone 1
17 Neighborhood sustainability
certification program
Program administrator Telephone 1
18 Neighborhood sustainability
certification program
Program administrator Washington D.C. 1
19 Built environment raking program Program administrator Washington D.C. 2
20 National NGO, VEP sponsor Program administrator Washington D.C. 3
21 National NGO, VEP sponsor Program administrator Telephone 1
22 National NGO, VEP sponsor Program administrator Telephone 1
23 Local NGO, VEP sponsor Program administrator Washington D.C. 1
24 EPA, VEP sponsor Program administrator Washington D.C. 2
25 USAID, VEP sponsor Program administrator Washington D.C. 1
26 National NGO Environmental advocate Dallas 1
27 California NGO Environmental advocate San Diego 1
Table 6 Summary of Findings
124

Hypothesis Evidence
Motivations
Public recognition
Strong evidence. Participating cities intend to acquire national
recognition and signal a green image to businesses and citizens.
External stress
Modest evidence. In the analysis, cities' participation in ISO 14001 or
STAR was driven by a federal agency’s mandate, national competition,
and relief from future regulatory pressures.
Knowledge
transferred from
programs
Strong evidence. Interviewees suggested that knowledge transferred
from ISO 14001 and STAR programs—including frameworks,
assessments, workshops, and consultancy—are highly valuable to cities'
sustainability practices. However, based on counterfactual cases (e.g.
NYC and other city-targeted VEPs), knowledge of sustainability
planning can be gathered through alternative mechanisms.
Effect of participation
Limited evidence indicating that participation in ISO 14001 or STAR
results in citywide environmental performance improvement.

Strong evidence demonstrates that internal benefits include capacity
building and morale boost. While employees of ISO-accredited cities
suggested the environmental management system saved costs in cities'
daily operation, STAR-ranked cities use the program framework as a
reference to update strategic sustainability plans. Both ISO 14001 and
STAR programs generate an enduring effect that shapes internal culture
and institutions; cities are likely to seek recertification due to the
increased returns of participation.

125

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Abstract (if available)

Abstract Cities are the home of more than half of the world’s population and account for two-thirds of the world’s energy. As great emitters of various pollutants, cities serve a crucial role in developing renewable energy and reducing greenhouse gas emissions. Numerous studies have examined the determinants of the adoption on urban sustainability initiatives. In contrast, the literature around local renewable energy policy adoption is limited. Also, while extant literature on renewable energy policies mostly investigates the role of federal and state governments, scholarly work pays less attention to their local counterparts. Topics around another emerging policy instrument to facilitate local sustainability—city sustainability certifications or rating programs—attract even less research interest from scholars and remain unexplored. This three-essay dissertation contributes empirical insights broadly on the sustainability policy adoption literature and helps policy scholars and practitioners understand the motivations of local governments in the United States to adopt renewable energy goals, solar approval processes, and sustainability certifications or rating programs. ❧ Drawing hypotheses from and contributing to the multilevel governance framework and municipal capacity literature, the first essay tests the impacts of Type I hierarchal governance (state-level renewable energy goals) and Type II horizontal governance (regional collaboration on renewable energy planning and membership in transnational climate networks) on local renewable energy goal-setting. By testing a dataset containing more than 570 cities, towns, and counties across the 48 states with multilevel mixed effects logistic regressions, the results indicate that state-level renewable energy goals and participation in regional coordination on renewable energy planning are positively correlated with local renewable energy goal-setting. The results also demonstrate that local governments’ fiscal and technical capacity and ownership of a municipal utility make the adoption of local renewable or solar energy goals more likely. However, the form of local government, a high share of pro-environmental voters, and homeownership do not appear to influence the local provision of renewable and solar energy. ❧ Focusing on cities in California, the second essay examines the determinants for local solar approval processes, as well as the impact of solar approval process on small-scaled residential solar photovoltaic (PV) installations. By improving solar reviewing processes, local governments play a facilitating role in reducing the soft costs for onsite solar PV systems, and they encourage the deployment of solar energy technologies at the local level. Utilizing the data collected from California’s annual statewide planning surveys, the results show that cities with large population size, ownership of a municipal utility, high degree of residents’ environmental ideology, high education level of residents, and lower density are more likely to adopt solar approval processes. More importantly, this analysis provides empirical evidence that the presence of a local solar approval process increases the total size (in kW) and quantity of small-scaled residential solar PV installations in a city. The result highlights the important role of local governments and policies in promoting the deployment of solar PV at the local level. ❧ The third essay examines cities’ impetuses, decision-making processes, and the effect of participating in sustainability certifications or rating programs. In response to the multifaceted challenges of urban climate governance, some cities decide to join voluntary environmental programs (VEPs) as one means to address climate change and promote local sustainability. Prior studies around VEPs mostly have firm or facility as the unit of analysis and investigate the motivations and the effectiveness of business firms’ participation into VEPs, while VEPs in the public sector are rarely studied. By reviewing and documenting the firsthand experiences of five U.S. cities in joining two sustainability certifications or rating programs, this study examines whether cities are driven by the three widely believed factors that motivate organizations’ VEP participation in the literature: public recognition, external pressures, and the value of knowledge transferred from VEPs. By conducting semi-structured interviews with staff in city, regional and federal agencies, nonprofit organizations, and other voluntary programs, the analysis shows that cities’ participation in sustainability certifications or rating programs is similarly driven by these three motivations suggested in the VEP literature. The results indicate strong evidence that cities’ participation in sustainability certifications or rating programs are, as previous literature suggests, largely motivated by public recognition. City governments are also found to value the knowledge transferred from the VEPs highly, although the findings also reveal the existence of alternative knowledge-gathering mechanisms from which cities can obtain information regarding local sustainability planning. The analysis also supports the hypothesis that cities’ participation in sustainability certifications or rating programs is sometimes driven by external stress, such as regulatory pressures and peer competition. While there is no evidence indicating participation in VEPs improves citywide environmental performance, city governments report gaining internal benefits, including capacity building and increased morale, from the participation process. This research highlights the non-environmental benefits of VEPs that potentially strengthen city governments’ capacity and institutions for addressing complex sustainability issues at the local level.

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Asset Metadata

Creator Hsu, Jenneille Hwai-Yuan (author)

Core Title Why go green? Cities' adoption of local renewable energy policies and urban sustainability certifications

School School of Policy, Planning and Development

Degree Doctor of Philosophy

Degree Program Public Policy and Management

Publication Date 10/06/2017

Defense Date 07/14/2017

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag Local government,multilevel governance,OAI-PMH Harvest,policy adoption,policy implementation,renewable energy policy,solar approval process,urban sustainability policy,voluntary environmental programs

Language English

Contributor Electronically uploaded by the author (provenance)

Advisor Tang, Shui Yan (committee chair), Mazmanian, Daniel (committee member), Rose, Adam (committee member)

Creator Email jenneilh@usc.edu,jenneillehsu@gmail.com

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c40-442661

Unique identifier UC11264273

Identifier etd-HsuJenneil-5819.pdf (filename),usctheses-c40-442661 (legacy record id)

Legacy Identifier etd-HsuJenneil-5819.pdf

Dmrecord 442661

Document Type Dissertation

Rights Hsu, Jenneille Hwai-Yuan

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the a...

Repository Name University of Southern California Digital Library

Repository Location USC Digital Library, University of Southern California, University Park Campus MC 2810, 3434 South Grand Avenue, 2nd Floor, Los Angeles, California 90089-2810, USA