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Voluntary agreements: cost-effective or a smokescreen for failure?

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  • Kilian Bizer

Abstract

Voluntary environmental agreements are widely considered an alternative instrument to command-and-control policies or economic incentives and are frequently labeled “efficient” or “cost-effective.” In this article it is argued that voluntary agreements are much more limited in scope. It is shown that agreements are cost-effective only under restrictive conditions rarely observed and that flexibility of nonbinding agreements often results in failing the environmental objectives altogether. Empirical evidence of an interdisciplinary analysis of eight case studies suggests that voluntary agreements should be applied as additional instruments rather than alternatives where small and homogeneous groups can be motivated to adhere to voluntary standards or where government agencies carry “big sticks” (i.e., threats of regulatory standards). Copyright Springer Japan 1999

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  • Kilian Bizer, 1999. "Voluntary agreements: cost-effective or a smokescreen for failure?," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 2(2), pages 147-165, June.
    • Handle: RePEc:spr:envpol:v:2:y:1999:i:2:p:147-165
    DOI: 10.1007/BF03353908
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    References listed on IDEAS

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    1. Bruno S. Frey, 1997. "Not Just for the Money," Books, Edward Elgar Publishing, number 1183.
    2. John Pezzey, 1992. "The Symmetry between Controlling Pollution by Price and Controlling It by Quantity," Canadian Journal of Economics, Canadian Economics Association, vol. 25(4), pages 983-991, November.
    3. Seema Arora & Timothy N. Cason, 1996. "Why Do Firms Volunteer to Exceed Environmental Regulations? Understanding Participation in EPA's 33/50 Program," Land Economics, University of Wisconsin Press, vol. 72(4), pages 413-432.
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    Cited by:

    1. Keith Brouhle & Charles Griffiths & Ann Wolverton, 2007. "Evaluating the Effectiveness of EPA Voluntary Programs: An Examination of the Strategic Goals Program for Metal Finishers," NCEE Working Paper Series 200706, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised May 2007.
    2. Keith Brouhle & Charles Griffiths & Ann Wolverton, 2004. "The Use of Voluntary Approaches for Environmental Policymaking in the U.S," NCEE Working Paper Series 200405, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised May 2004.
    3. Maia David, 2004. "Les approches volontaires comme instrument de régulation environnementale," Revue Française d'Économie, Programme National Persée, vol. 19(1), pages 227-273.
    4. Makoto Sugino & Toshi Arimura, 2011. "The effects of voluntary action plans on energy-saving investment: an empirical study of the Japanese manufacturing sector," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 13(3), pages 237-257, September.
    5. Watzold, Frank, 2000. "Efficiency and applicability of economic concepts dealing with environmental risk and ignorance," Ecological Economics, Elsevier, vol. 33(2), pages 299-311, May.

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