Document Type

Article

Publication Date

6-3-2016

Abstract

For the last several decades, governments around the world have tried to use so-called voluntary programs to motivate private firms to act proactively to protect the environment. Unlike conventional environmental regulation, voluntary programs offer businesses flexibility to adopt cost-effective measures to reduce environmental impacts. Rather than prodding firms to act through threats of enforcement, they aim to entice firms to move forward by offering various kinds of positive incentives, ranging from public recognition to limited forms of regulatory relief. Despite the theoretical appeal of voluntary programs, their proper role in government’s environmental toolkit depends on the empirical evidence of how these programs work in practice. This paper offers a comprehensive empirical overview of voluntary programs’ design and impact. It shows that not all voluntary programs are the same. Rates of business participation in voluntary programs depend on a variety of factors, including both how these programs are designed as well as, importantly, what kinds of relevant background regulatory threats may loom for business. Although governments and policy advocates sometimes urge voluntary programs as a substitute for conventional government regulation, it appears that the most effective voluntary programs depend on a robust backdrop of community pressure and regulatory threats. Studies that find these programs yield statistically discernible effects on firm behavior generally find only substantively small impacts, suggesting that at best voluntary programs can serve as a modest supplement to government regulation.

Comments

In Decision Making in Environmental Law (Lee Paddock, Robert Glicksman, & Nicholas S. Bryner eds., Elgar forthcoming 2016).