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Voluntary Emission Reductions, Social Rewards, and Environmental Policy

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  • Michael Rauscher

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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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1838.

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

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  1. Gneezy, U. & Rustichini, A., 1998. "Pay Enough - Or Don't Pay at All," Discussion Paper, Tilburg University, Center for Economic Research 1998-57, Tilburg University, Center for Economic Research.
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Cited by:
  1. Lundgren, Tommy & Marklund, Per-Olov, 2012. "Environmental Performance and Profits," CERE Working Papers, CERE - the Center for Environmental and Resource Economics 2012:8, CERE - the Center for Environmental and Resource Economics.
  2. Johan EYCKMANS & Snorre KVERNDOKK, 2009. "Moral concerns on tradable pollution permits in international environmental agreements," Center for Economic Studies - Discussion papers, Katholieke Universiteit Leuven, Centrum voor Economische Studiën ces09.12, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  3. Nyborg, Karine & Brekke, Kjell Arne, 2009. "Selfish Bakers, Caring Nurses? A Model of Work Motivation," HERO On line Working Paper Series, Oslo University, Health Economics Research Programme 2008:1, Oslo University, Health Economics Research Programme.
  4. Erik Gawel, 2001. "Intrinsische Motivation und umweltpolitische Instrumente," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, Verein für Socialpolitik, vol. 2(2), pages 145-165, 05.
  5. Nyborg, Karine, 2011. "I don't want to hear about it: Rational ignorance among duty-oriented consumers," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 79(3), pages 263-274, August.
  6. 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, Sustainable Investment Research Platform 2008/1, Sustainable Investment Research Platform.
  7. Elisabeth Gsottbauer & Jeroen Bergh, 2011. "Environmental Policy Theory Given Bounded Rationality and Other-regarding Preferences," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 49(2), pages 263-304, June.
  8. 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, Tinbergen Institute 98-121/3, Tinbergen Institute.

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