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Environmental Regulation through Voluntary Agreements

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  • Hansen, Lars Gårn

Abstract

Voluntary agreements with polluting industries are becoming a popular alternative to traditional environmental regulation. One reason may be that voluntary agreements can reduce compliance costs of polluting industries. In this paper we develop a family of simple policy formulation and implementation models enabling us to formally characterize the policy environments that make voluntary agreements possible. The main message of this paper is one of caution. Voluntary agreements that increase compliance costs and reduce social welfare can not be ruled out. The analyses also suggests that giving the legislative branch of government an effective power of veto reduces (but does not eliminate) the possibility of welfare reducing voluntary agreements.

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File URL: http://mpra.ub.uni-muenchen.de/47537/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 47537.

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Date of creation: 1997
Date of revision: 1999
Handle: RePEc:pra:mprapa:47537

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Keywords: Voluntary Agreements;

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References

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  1. Freixas, Xavier & Laffont, Jean-Jacques, 1985. "Average cost pricing versus marginal cost pricing under moral hazard," Journal of Public Economics, Elsevier, Elsevier, vol. 26(2), pages 135-146, March.
  2. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262121743, December.
  3. Daniel F. Spulber, 1989. "Regulation and Markets," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262192756, December.
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Citations

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Cited by:
  1. Anna Alberini & Kathleen Segerson, 2002. "Assessing Voluntary Programs to Improve Environmental Quality," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 22(1), pages 157-184, June.
  2. James Cunningham & J Peter Clinch, 2005. "Innovation and Environmental Voluntary Approaches," Journal of Environmental Planning and Management, Taylor & Francis Journals, Taylor & Francis Journals, vol. 48(3), pages 373-392.
  3. R. Bracke & J. Albrecht & M. De Clercq, 2006. "The use of negotiated environmental agreements: from gentlemen’s agreements to binding contracts," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium, Ghent University, Faculty of Economics and Business Administration 06/415, Ghent University, Faculty of Economics and Business Administration.
  4. Khanna, Madhu, 2001. " Non-mandatory Approaches to Environmental Protection," Journal of Economic Surveys, Wiley Blackwell, Wiley Blackwell, vol. 15(3), pages 291-324, July.
  5. Lyon, Thomas P. & Maxwell, John W., 2003. "Self-regulation, taxation and public voluntary environmental agreements," Journal of Public Economics, Elsevier, Elsevier, vol. 87(7-8), pages 1453-1486, August.
  6. Manzini, Paola & Mariotti, Marco, 2003. "A bargaining model of voluntary environmental agreements," Journal of Public Economics, Elsevier, Elsevier, vol. 87(12), pages 2725-2736, December.
  7. Iulie Aslaksen & Terje Synnestvedt, 2003. "Corporate environmental protection under uncertainty," Discussion Papers, Research Department of Statistics Norway 355, Research Department of Statistics Norway.
  8. Lutz, Stefan & Lyon, Thomas P & Maxwell, John W, 2000. "Quality Leadership When Regulatory Standards Are Forthcoming," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 48(3), pages 331-48, September.
  9. Maxwell, John W., 1998. "Designing voluntary environmental agreements in Europe: Some lessons from the U.S. EPA's 33/50 program," ZEI Working Papers B 07-1998, ZEI - Center for European Integration Studies, University of Bonn.
  10. R. Brau & C. Carraro, 2004. "The economic analysis of voluntary approaches to environmental protection. A survey," Working Paper CRENoS 200420, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  11. Thomas P. Lyon & John W. Maxwell, 2004. "Mandatory and Voluntary Approaches to Mitigating Climate Change," Working Papers, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy 2004-28, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
  12. Kjell Sunnev�g, 2000. "Voluntary agreements and the incentives for innovation," Environment and Planning C: Government and Policy, Pion Ltd, London, Pion Ltd, London, vol. 18(5), pages 555-573, October.
  13. Matthieu Glachant, 2003. "Voluntary Agreements under Endogenous Legislative Threats," Working Papers, Fondazione Eni Enrico Mattei 2003.36, Fondazione Eni Enrico Mattei.
  14. Bjorner, Thomas Bue & Jensen, Henrik Holm, 2002. "Energy taxes, voluntary agreements and investment subsidies--a micro-panel analysis of the effect on Danish industrial companies' energy demand," Resource and Energy Economics, Elsevier, Elsevier, vol. 24(3), pages 229-249, June.
  15. Khanna, Madhu & Damon, Lisa A., 1999. "EPA's Voluntary 33/50 Program: Impact on Toxic Releases and Economic Performance of Firms," Journal of Environmental Economics and Management, Elsevier, vol. 37(1), pages 1-25, January.
  16. Adrienne Héritier & Sandra Eckert, 2007. "New Modes of Governance in the Shadow of Hierarchy: Self-Regulation by Industry in Europe," EUI-RSCAS Working Papers, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS) 20, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
  17. Daniel Fernández-Kranz & Juan Santaló, 2010. "When Necessity Becomes a Virtue: The Effect of Product Market Competition on Corporate Social Responsibility," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 19(2), pages 453-487, 06.
  18. Hansen, Lars Gårn, 2005. "Aspects of the political economy of environmental voluntary agreements - a meta study," MPRA Paper 49200, University Library of Munich, Germany.
  19. Grepperud, Sverre, 2002. "Voluntary environmental agreements: bargaining over more than emissions," European Journal of Political Economy, Elsevier, Elsevier, vol. 18(3), pages 545-559, September.
  20. Gamper-Rabindran, Shanti, 2006. "Did the EPA's voluntary industrial toxics program reduce emissions? A GIS analysis of distributional impacts and by-media analysis of substitution," Journal of Environmental Economics and Management, Elsevier, vol. 52(1), pages 391-410, July.
  21. Daniel Fernandez & Juan Santalo, 2008. "When Necessity Becomes a Virtue: The Effect of Product Market Competition on CSR," Working Papers Economia, Instituto de Empresa, Area of Economic Environment wp08-27, Instituto de Empresa, Area of Economic Environment.

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