Certification as a Rationale for Voluntary Agreements
AbstractI model the participation of firms in a voluntary agreement as a costly certification process whereby a firm informs the Regulator of its pollution intensity. Without this knowledge, the Regulator imposes the same tax on all firms in a heterogeneous industry, unduly hurting the clean ones with the lowest intensity. Certification allows clean firms to get a tax rebate. It also entails an informational externality as the dispersion of types decreases within the pool of non-participating firms, following an unraveling process. Because participation is a firm’s private decision, there is such a thing as a bad voluntary agreement.
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Bibliographic InfoPaper provided by University of Laval, Center for Research on the Economics of the Environment, Agri-food, Transports and Energy (CREATE) in its series Working Papers with number 117827.
Date of creation: Nov 2011
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Certification; voluntary agreements; Pigovian taxes; pollution; Environmental Economics and Policy; L51; Q53; Q58;
Other versions of this item:
- Patrick Gonzalez, 2011. "Certification as a Rationale for Voluntary Agreements," Cahiers de recherche CREATE 2011-2, CREATE.
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
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- Simon Ashby & Swee-Hoon Chuah & Robert Hoffmann, 2004.
"Industry Self-Regulation: A Game-Theoretic Typology of Strategic Voluntary Compliance,"
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- Simon Ashby & Swee Hoon Chuah & Robert Hoffmann, 2003. "Industry Self-Regulation: A Game-Theoretic Typology of Strategic Voluntary Compliance," Occasional Papers 2, Nottingham University Business School.
- Simon Ashby & Swee Hoon Chuah & Robert Hoffmann, 2003. "Industry Self-Regulation: A Game-Theoretic Typology of Strategic Voluntary Compliance," Occasional Papers 3, Industrial Economics Division.
- Na Li Dawson & Kathleen Segerson, 2008.
"Voluntary Agreements with Industries: Participation Incentives with Industry-Wide Targets,"
University of Wisconsin Press, vol. 84(1), pages 97-114.
- Na Li Dawson & Kathleen Segerson, 2003. "Voluntary Agreements with Industries: Participation Incentives with Industry-wide Targets," Working papers 2004-06, University of Connecticut, Department of Economics.
- Segerson, Kathleen & Miceli, Thomas J., 1998. "Voluntary Environmental Agreements: Good or Bad News for Environmental Protection?," Journal of Environmental Economics and Management, Elsevier, vol. 36(2), pages 109-130, September.
- Heyes, Anthony G., 2005. "A signaling motive for self-regulation in the shadow of coercion," Journal of Economics and Business, Elsevier, vol. 57(3), pages 238-246.
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