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Voluntary agreements and private enforcement of environmental regulation

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  • Christian Langpap

Abstract

This paper focuses on a type of voluntary pollution abatement agreement (VA) in which the regulator offers regulatory relief for the participating firm in exchange for environmental improvements. If the regulator does not have statutory authority to provide regulatory relief, the VA can leave the firm more vulnerable to legal challenges through citizen lawsuits. I use a model of negotiated VAs to examine the impact of citizen enforcement on the likelihood of an agreement and on the outcome of a VA. The findings indicate that both the probabilities of enforcement by the regulatory agency and of private enforcement through a citizen lawsuit affect the likelihood of a VA and the level of abatement when an agreement is reached. A VA can result in higher abatement and net social benefits than regulation if the probability of private enforcement and accompanying costs are high and the probability of agency enforcement is low. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Christian Langpap, 2015. "Voluntary agreements and private enforcement of environmental regulation," Journal of Regulatory Economics, Springer, vol. 47(1), pages 99-116, February.
    • Handle: RePEc:kap:regeco:v:47:y:2015:i:1:p:99-116
    DOI: 10.1007/s11149-014-9265-8
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    Cited by:

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    3. Xin Wang & Soo-Haeng Cho & Alan Scheller-Wolf, 2021. "Green Technology Development and Adoption: Competition, Regulation, and Uncertainty—A Global Game Approach," Management Science, INFORMS, vol. 67(1), pages 201-219, January.
    4. Sung-Hoon Park & Chad Settle, 2022. "Internalizing environmental damages and endogenous reimbursement in environmental conflicts: a game-theoretic analysis," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 69(4), pages 547-569, December.

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    More about this item

    Keywords

    Voluntary agreement; Bargaining; Citizen suits; Citizen enforcement; Regulation; Pollution policy; Q53; Q58;
    All these keywords.

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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