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Voluntary- and Information-Based Approaches to Environmental Management: A Public Economics Perspective

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  • Matthew J. Kotchen

Abstract

Interest in decentralized approaches to environmental management has grown significantly in recent years. Along with the standard instruments of environmental policy--quantity, price, and technology regulations--is a growing number of voluntary--and information-based approaches (VIBAs) that includes more decentralized policies, programs, and market trends. This article offers a perspective on VIBAs through the lens of public economic theory. The unifying theme is that many VIBAs are based on the creation of impure public goods and/or clubs. The innovation of these arrangements is the way in which jointly produced private benefits effectively subsidize the voluntary provision of public goods. From this perspective, VIBAs can be viewed as a property rights approach because they privatize an aspect of public good provision in order to make such provision more incentive compatible with firm or individual preferences for decision making. Although VIBAs have the potential to promote environmental protection and economic efficiency, these outcomes are not assured. However, a more careful examination of the theoretical basis for VIBAs can help us identify the circumstances under which these approaches hold the greatest promise for efficient environmental policy. (JEL: H41, Q58) Copyright 2013, Oxford University Press.

Suggested Citation

  • Matthew J. Kotchen, 2013. "Voluntary- and Information-Based Approaches to Environmental Management: A Public Economics Perspective," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 7(2), pages 276-295, July.
    • Handle: RePEc:oup:renvpo:v:7:y:2013:i:2:p:276-295
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    Citations

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    Cited by:

    1. Mary F. Evans, 2016. "The Clean Air Act Watch List: An Enforcement and Compliance Natural Experiment," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(3), pages 627-665.
    2. Matthew Potoski, 2017. "Green clubs in building block climate change regimes," Climatic Change, Springer, vol. 144(1), pages 53-63, September.
    3. Carmen Arguedas & Esther Blanco, 2014. "Incentives for Voluntary Practices, Fraud, and Certification," Working Papers 2014-18, Faculty of Economics and Statistics, Universität Innsbruck.
    4. Grischa Perino, 2015. "Climate Campaigns, Cap and Trade, and Carbon Leakage: Why Trying to Reduce Your Carbon Footprint Can Harm the Climate," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(3), pages 469-495.
    5. León, Carmelo J. & Araña, Jorge E. & Hanemann, W. Michael & Riera, Pere, 2014. "Heterogeneity and emotions in the valuation of non-use damages caused by oil spills," Ecological Economics, Elsevier, vol. 97(C), pages 129-139.
    6. Hickman Daniel C. & Meyer Andrew G., 2016. "Does Eco-labeling of Services Matter? Evidence from Higher Education," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(4), pages 1-18, October.
    7. Shaun Larcom & Terry Gevelt, 2019. "Do Voluntary Commons Associations Deliver Sustainable Grazing Outcomes? An Empirical Study of England," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(1), pages 51-74, May.
    8. Alistair Munro & Marieta Valente, 2016. "Green Goods: Are They Good or Bad News for the Environment? Evidence from a Laboratory Experiment on Impure Public Goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(2), pages 317-335, October.
    9. Matthew Kotchen & Kathleen Segerson, 2020. "The Use of Group-Level Approaches to Environmental and Natural Resource Policy," NBER Working Papers 27142, National Bureau of Economic Research, Inc.
    10. Evans, Mary F. & Liu, Lirong & Stafford, Sarah L., 2015. "Standardization and the impacts of voluntary program participation: Evidence from environmental auditing," International Review of Law and Economics, Elsevier, vol. 43(C), pages 10-21.
    11. Arguedas, Carmen & Blanco, Esther, 2014. "On Fraud and Certification of Corporate Social Responsibility," Working Papers in Economic Theory 2014/02, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
    12. Park, Ju Young, 2017. "Is there a price premium for energy efficiency labels? Evidence from the Introduction of a Label in Korea," Energy Economics, Elsevier, vol. 62(C), pages 240-247.

    More about this item

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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