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Voluntary Emission Reductions, Social Rewards, and Environmental Policy

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Author Info
Michael Rauscher ()

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Abstract

Social norms and intrinsic motivations lead to environmentally friendly behaviour even in the absence of environmental policy. This paper looks at the interactions of social norms and environmental regulation in their impact on individual behaviour. People obtain social rewards for voluntary abatement efforts. These social rewards may be crowded out by environmental regulation taking the shape of standards or taxes. Moreover, the paper shows that environmental externalities and externalities related to social norms interact and that an optimal environmental policy should consider both types of externalities. From a general welfare point of view, emission taxes are superior to emission standards, but people responsive to social rewards prefer standards.

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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 1838.

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Date of creation: 2006
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Handle: RePEc:ces:ceswps:_1838

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Find related papers by JEL classification:
H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Cardenas, Juan Camilo & Stranlund, John & Willis, Cleve, 2000. "Local Environmental Control and Institutional Crowding-Out," World Development, Elsevier, vol. 28(10), pages 1719-1733, October. [Downloadable!] (restricted)
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  2. Frey, Bruno S., 1993. "Motivation as a limit to pricing," Journal of Economic Psychology, Elsevier, vol. 14(4), pages 635-664, December. [Downloadable!] (restricted)
  3. Lai, Ching-Chong & Yang, Chih-Yu & Chang, Juin-Jen, 2003. "Environmental Regulations and Social Norms," International Tax and Public Finance, Springer, vol. 10(1), pages 63-75, January. [Downloadable!] (restricted)
  4. Frey, Bruno S, 1986. "Economists Favour the Price System--Who Else Does?," Kyklos, Blackwell Publishing, vol. 39(4), pages 537-63.
  5. Naylor, Robin, 1990. "A social custom model of collective action," European Journal of Political Economy, Elsevier, vol. 6(2), pages 201-216, October. [Downloadable!] (restricted)
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  6. Myles, Gareth D. & Naylor, Robin A., 1996. "A model of tax evasion with group conformity and social customs," European Journal of Political Economy, Elsevier, vol. 12(1), pages 49-66, April. [Downloadable!] (restricted)
  7. Kandel, Eugene & Lazear, Edward P, 1992. "Peer Pressure and Partnerships," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 801-17, August. [Downloadable!] (restricted)
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  8. Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough Or Don'T Pay At All," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 791-810, August. [Downloadable!] (restricted)
  9. Mellström, Carl & Johannesson, Magnus, 2005. "Crowding Out in Blood Donation: Was Titmuss Right?," Working Papers in Economics 180, Göteborg University, Department of Economics, revised 08 Feb 2008. [Downloadable!]
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  10. Gachter, Simon & Fehr, Ernst, 1999. "Collective action as a social exchange," Journal of Economic Behavior & Organization, Elsevier, vol. 39(4), pages 341-369, July. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Jeroen C.J.M. van den Bergh & Ada Ferrer-I-Carbonell & Guiseppe Munda, 1998. "Models of Individual Behavior and Implications for Environmental Policy," Tinbergen Institute Discussion Papers 98-121/3, Tinbergen Institute. [Downloadable!]
  2. Nyborg, Karine, 2008. "I Don't Want to Hear About it: Rational Ignorance among Duty-Oriented Consumers," Memorandum 15/2008, Oslo University, Department of Economics. [Downloadable!]
  3. Lundgren, Tommy & Olsson, Rickard, 2008. "How Bad is Bad News? Assessing the Effects of Environmental Incidents on Firm Value," Sustainable Investment and Corporate Governance Working Papers 2008/1, Sustainable Investment Research Platform. [Downloadable!]
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