Voluntary Approaches to Environmental Protection and Resource Management

Policy makers around the world seem to have widely endorsed the use of voluntary approaches as a means to address concerns about environmental protection and resource degradation. Voluntary approaches have been adopted in many developed countries, as well as in a number of developing countries. However, economists have not uniformly endorsed this policy approach. The economic literature suggests that in some contexts voluntary approaches can be effective if carefully designed but are not likely to be effective otherwise. This article provides an overview of the economics of voluntary approaches, with a particular focus on issues related to design. It seeks to highlight the features that are important determinants of both their success in improving environmental outcomes and their efficiency. Although the discussion focuses on environmental protection, it is also relevant in other contexts such as conservation and fisheries management.