Voluntary Agreements with Industries: Participation Incentives with Industry-Wide Targets
We consider a policy environment in which an entire industry is faced with possible imposition of an emissions tax if environmental goals are not met voluntarily. We develop a multiple-firm model of pollution abatement in this context. Using the concept of a self-enforcing equilibrium, we examine the free-riding incentive of individual firms and its impact on the viability of the voluntary approach. We find that, despite the free-riding problem, a sub-group of firms have an incentive to participate in the VA. The VA is strictly preferred by the industry as a whole, although it is not cost-minimizing.
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.:
- John W. Maxwell & Thomas P Lyon & Steven C.. Hackett, 1995.
"Self-Regulation and Social Welfare: The Political Economy of Corporate Environmentalism,"
University of Chicago - George G. Stigler Center for Study of Economy and State
122, Chicago - Center for Study of Economy and State.
- Maxwell, John W & Lyon, Thomas P & Hackett, Steven C, 2000. "Self-Regulation and Social Welfare: The Political Economy of Corporate Environmentalism," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 583-617, October.
- Karine Nyborg, 2000. "Voluntary Agreements and Non-Verifiable Emissions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 17(2), pages 125-144, October.
- Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-94, Supplemen.
- Wu, JunJie & Babcock, Bruce A., 1996.
"Contract Design for the Purchase of Environmental Goods from Agriculture,"
Staff General Research Papers
1050, Iowa State University, Department of Economics.
- JunJie Wu & Bruce A. Babcock, 1996. "Contract Design for the Purchase of Environmental Goods from Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 935-945.
- Nir Becker & K. William Easter, 1999. "Conflict and Cooperation in Managing International Water Resources Such as the Great Lakes," Land Economics, University of Wisconsin Press, vol. 75(2), pages 233-245.
- Marks, Melanie B & Croson, Rachel T A, 1999. " The Effect of Incomplete Information in a Threshold Public Goods Experiment," Public Choice, Springer, vol. 99(1-2), pages 103-18, April.
- Carraro, Carlo & Siniscalco, Domenico, 1993.
"Strategies for the international protection of the environment,"
Journal of Public Economics,
Elsevier, vol. 52(3), pages 309-328, October.
- Carraro, Carlo & Siniscalco, Domenico, 1991. "Strategies for the International Protection of the Environment," CEPR Discussion Papers 568, C.E.P.R. Discussion Papers.
- Bagnoli, Mark & McKee, Michael, 1991. "Voluntary Contribution Games: Efficient Private Provision of Public Goods," Economic Inquiry, Western Economic Association International, vol. 29(2), pages 351-66, April.
- 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.
- 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.
- Revesz, Richard L. & Stavins, Robert N., 2007. "Environmental Law," Handbook of Law and Economics, Elsevier.
- Rondeau, Daniel & D. Schulze, William & Poe, Gregory L., 1999.
"Voluntary revelation of the demand for public goods using a provision point mechanism,"
Journal of Public Economics,
Elsevier, vol. 72(3), pages 455-470, June.
- Rondeau, Daniel & Schulze, William D. & Poe, Gregory L., 1997. "Voluntary Revelation Of The Demand For Public Goods Using A Provision Point Mechanism," Working Papers 7265, Cornell University, Department of Applied Economics and Management.
- Donsimoni, Marie-Paule & Economides, Nicholas S & Polemarchakis, Herakles M, 1986. "Stable Cartels," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(2), pages 317-27, June.
- Wu, JunJie & Babcock, Bruce A., 1995.
"Optimal Design Of A Voluntary Green Payment Program Under Asymmetric Information,"
Journal of Agricultural and Resource Economics,
Western Agricultural Economics Association, vol. 20(02), December.
- JunJie Wu & Bruce A. Babcock, 1995. "Optimal Design of a Voluntary Green Payment Program Under Asymmetric Information," Center for Agricultural and Rural Development (CARD) Publications 95-wp131, Center for Agricultural and Rural Development (CARD) at Iowa State University.
- Wu, JunJie & Babcock, Bruce A., 1995. "Optimal Design of a Voluntary Green Payment Program Under Asymmetric Information," Staff General Research Papers 843, Iowa State University, Department of Economics.
- Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March.
- S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
- Stranlund John K., 1995. "Public Mechanisms to Support Compliance to an Environmental Norm," Journal of Environmental Economics and Management, Elsevier, vol. 28(2), pages 205-222, March.
- Bagnoli, Mark & Lipman, Barton L, 1989. "Provision of Public Goods: Fully Implementing the Core through Private Contributions," Review of Economic Studies, Wiley Blackwell, vol. 56(4), pages 583-601, October.
When requesting a correction, please mention this item's handle: RePEc:uwp:landec:v:84:y:2008:i:1:p:97-114. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.