IDEAS home Printed from https://ideas.repec.org/p/crt/wpaper/0403.html
   My bibliography  Save this paper

Participation in and Compliance with Public Voluntary Environmental Programs: An Evolutionary Approach

Author

Listed:
  • Anastasios Xepapadeas

    (Department of Economics, University of Crete, Greece)

  • Constadina Passa

    (Department of Economics, University of Crete, Greece)

Abstract

The joint evolution of participating and complying firms in a public VA, along with the evolution of the pollution stock is examined. Replicator dynamics modeling participation and compliance are combined with pollution stock dynamics. Fast-slow selection dynamics are used to capture the fact that decisions to participate in and further comply with the public VA evolve in different time scales. Evolutionary stable (ES) equilibria depend on the structure of the legislation and auditing probability. Partial participation and partial compliance can be ES equilibria, with possible multiplicities, in addition to the monomorphic equilibria of full (non) compliance. Convergence to these equilibria could be monotonic or oscillating. Full participation and compliance can be attained if the regulator is pre-committed to certain legislation and inspection probabilities, or by appropriate choices of the legislatively set emission level and the non-compliance fine.

Suggested Citation

  • Anastasios Xepapadeas & Constadina Passa, 2004. "Participation in and Compliance with Public Voluntary Environmental Programs: An Evolutionary Approach," Working Papers 0403, University of Crete, Department of Economics.
    • Handle: RePEc:crt:wpaper:0403
    as

    Download full text from publisher

    File URL: http://economics.soc.uoc.gr/wpa/docs/EARE_Xepapadeas_Passa.pdf
    File Function: First version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Malik Arun S., 1993. "Self-Reporting and the Design of Policies for Regulating Stochastic Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 24(3), pages 241-257, May.
    2. 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.
    3. Na Li Dawson & Kathleen Segerson, 2008. "Voluntary Agreements with Industries: Participation Incentives with Industry-Wide Targets," Land Economics, University of Wisconsin Press, vol. 84(1), pages 97-114.
    4. Garvie, Devon & Keeler, Andrew, 1994. "Incomplete enforcement with endogenous regulatory choice," Journal of Public Economics, Elsevier, vol. 55(1), pages 141-162, September.
    5. Stranlund, John K. & Dhanda, Kanwalroop Kathy, 1999. "Endogenous Monitoring and Enforcement of a Transferable Emissions Permit System," Journal of Environmental Economics and Management, Elsevier, vol. 38(3), pages 267-282, November.
    6. Lyon, Thomas P. & Maxwell, John W., 2003. "Self-regulation, taxation and public voluntary environmental agreements," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1453-1486, August.
    7. Fahad Khalil, 1997. "Auditing Without Commitment," RAND Journal of Economics, The RAND Corporation, vol. 28(4), pages 629-640, Winter.
    8. John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June.
    9. Richard R. Nelson, 1995. "Recent Evolutionary Theorizing about Economic Change," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 48-90, March.
    10. van Egteren, Henry & Weber, Marian, 1996. "Marketable Permits, Market Power, and Cheating," Journal of Environmental Economics and Management, Elsevier, vol. 30(2), pages 161-173, March.
    11. Franckx, Laurent, 2002. "The Use of Ambient Inspections in Environmental Monitoring and Enforcement When the Inspection Agency Cannot Commit Itself to Announced Inspection Probabilities," Journal of Environmental Economics and Management, Elsevier, vol. 43(1), pages 71-92, January.
    12. Sethi, Rajiv & Somanathan, E, 1996. "The Evolution of Social Norms in Common Property Resource Use," American Economic Review, American Economic Association, vol. 86(4), pages 766-788, September.
    13. John A. List & Aart de Zeeuw (ed.), 2002. "Recent Advances in Environmental Economics," Books, Edward Elgar Publishing, number 2728.
    14. 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.
    15. Malik, Arun S., 1990. "Markets for pollution control when firms are noncompliant," Journal of Environmental Economics and Management, Elsevier, vol. 18(2), pages 97-106, March.
    16. Anastasios Xepapadeas, 2005. "Regulation and Evolution of Compliance in Common Pool Resources," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(3), pages 583-599, September.
    17. Anastasios Xepapadeas, 2003. "Regulation and Evolution of Harvesting Rules and Compliance in Common Pool Resources," Economic Working Papers at Centro de Estudios Andaluces E2003/39, Centro de Estudios Andaluces.
    18. Grieson, Ronald E. & Singh, Nirvikar, 1990. "Regulating externalities through testing," Journal of Public Economics, Elsevier, vol. 41(3), pages 369-387, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rinaldo Brau & Carlo Carraro, 2011. "The design of voluntary agreements in oligopolistic markets," Journal of Regulatory Economics, Springer, vol. 39(2), pages 111-142, April.
    2. Michèle Breton & Lucia Sbragia & Georges Zaccour, 2010. "A Dynamic Model for International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(1), pages 25-48, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anastasios Xepapadeas & Constadina Passa, 2005. "Design of Public Voluntary Environmental Programs for Nitrate Pollution in Agriculture: An Evolutionary Approach," Working Papers 0512, University of Crete, Department of Economics.
    2. Anastasios Xepapadeas, 2005. "Regulation and Evolution of Compliance in Common Pool Resources," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(3), pages 583-599, September.
    3. Anastasios Xepapadeas, 2003. "Regulation and Evolution of Harvesting Rules and Compliance in Common Pool Resources," Economic Working Papers at Centro de Estudios Andaluces E2003/39, Centro de Estudios Andaluces.
    4. Hsiao-Chi Chen & Shi-Miin Liu, 2005. "Tradeable-permit pollution control systems with and without commitment to auditing," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 7(1), pages 15-37, March.
    5. Stranlund, John K. & Chávez, Carlos A. & Villena, Mauricio G., 2009. "The optimal pricing of pollution when enforcement is costly," Journal of Environmental Economics and Management, Elsevier, vol. 58(2), pages 183-191, September.
    6. Hsiao-Chi Chen & Shi-Miin Liu, 2005. "Tradeable-permit pollution control systems with and without commitment to auditing," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 7(1), pages 15-37, March.
    7. Inés Macho-Stadler, 2008. "Environmental regulation: choice of instruments under imperfect compliance," Spanish Economic Review, Springer;Spanish Economic Association, vol. 10(1), pages 1-21, March.
    8. Hsiao-Chi Chen & Shi-Miin Liu & Chiung-Yun Chang, 2013. "Commitment or no-commitment to monitoring in emission tax systems?," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 15(2), pages 171-188, April.
    9. Johansson, Robert C., 2002. "Watershed Nutrient Trading Under Asymmetric Information," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 31(2), pages 1-13, October.
    10. Murphy, James J. & Stranlund, John K., 2007. "A laboratory investigation of compliance behavior under tradable emissions rights: Implications for targeted enforcement," Journal of Environmental Economics and Management, Elsevier, vol. 53(2), pages 196-212, March.
    11. David M. McEvoy & John K. Stranlund, 2007. "Costly Enforcement of Voluntary Environmental Agreements with Industries," Working Papers 07-15, Department of Economics, Appalachian State University.
    12. Stranlund, John K. & Murphy, James J. & Spraggon, John M., 2011. "An experimental analysis of compliance in dynamic emissions markets," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 414-429.
    13. John Stranlund, 2007. "The regulatory choice of noncompliance in emissions trading programs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 38(1), pages 99-117, September.
    14. Stranlund, John K. & Moffitt, L. Joe, 2014. "Enforcement and price controls in emissions trading," Journal of Environmental Economics and Management, Elsevier, vol. 67(1), pages 20-38.
    15. Takuro Miyamoto, 2016. "Why regulators adopt voluntary programs: a theoretical analysis of voluntary pollutant reduction programs," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(4), pages 599-623, October.
    16. Madhu Khanna, 2001. "Non‐Mandatory Approaches to Environmental Protection," Journal of Economic Surveys, Wiley Blackwell, vol. 15(3), pages 291-324, July.
    17. Murphy, James J. & Stranlund, John K., 2006. "Direct and market effects of enforcing emissions trading programs: An experimental analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 61(2), pages 217-233, October.
    18. Lange Ian, 2009. "Evaluating Voluntary Measures with Treatment Spillovers: The Case of Coal Combustion Products Partnership," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-22, September.
    19. Konishi, Hideki, 2005. "Intergovernmental versus intersource emissions trading when firms are noncompliant," Journal of Environmental Economics and Management, Elsevier, vol. 49(2), pages 235-261, March.
    20. Rinaldo 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.

    More about this item

    Keywords

    Voluntary agreements; participation; compliance; evolutionary stability; replicator dynamics.;
    All these keywords.

    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • L5 - Industrial Organization - - Regulation and Industrial Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:crt:wpaper:0403. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kostis Pigounakis (email available below). General contact details of provider: https://edirc.repec.org/data/deuchgr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.