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Evaluating Voluntary Climate Programs in the United States

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  • Pizer, William A.
  • Morgenstern, Richard

    (Resources for the Future)

  • Shih, Jhih-Shyang

    (Resources for the Future)

Abstract

Despite serving as the principal basis of U.S. climate policy over the past two decades, corporate voluntary environmental programs have been subject to quite limited evaluation. The self-selection of participants—an essential element of such initiatives—poses particular challenges to researchers because the decision to participate may not be random and, in fact, may be correlated with the outcomes. The present study is designed to overcome these problems by gauging the environmental effectiveness of two early voluntary climate change programs with established track records, the U.S. Environmental Protection Agency’s Climate Wise program and the U.S. Department of Energy’s Voluntary Reporting of Greenhouse Gases Program, or 1605(b). Both programs provide quite flexible criteria for firms to participate. Particular attention is paid to the participation decision and how various assumptions affect estimates of program outcomes using propensity score matching methods applied to plant-level Census data. Overall, we find quite modest effects: the reductions in fuel and electricity expenditures from Climate Wise and 1605(b) are no more than 10 percent and probably less than 5 percent. Virtually no evidence suggests a statistically significant effect of either Climate Wise or 1605(b) on fuel costs. Some evidence indicates that participation in Climate Wise led to a slight (3–5 percent) increase in electricity costs that vanished after two years. Stronger evidence suggests that participation in 1605(b) led to a slight (4–8 percent) decrease in electricity costs that persisted for at least three years.

Suggested Citation

  • Pizer, William A. & Morgenstern, Richard & Shih, Jhih-Shyang, 2010. "Evaluating Voluntary Climate Programs in the United States," RFF Working Paper Series dp-08-13-rev, Resources for the Future.
  • Handle: RePEc:rff:dpaper:dp-08-13-rev
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    References listed on IDEAS

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    Cited by:

    1. von Engelhardt, Sebastian & Maurer, Stephen, 2012. "Industry Self-Governance and National Security: On the Private Control of Dual Use Technologies," VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 66052, Verein für Socialpolitik / German Economic Association.
    2. Allen Blackman, 2012. "Does eco-certification boost regulatory compliance in developing countries? ISO 14001 in Mexico," Journal of Regulatory Economics, Springer, vol. 42(3), pages 242-263, December.
    3. Alexander Alexeev & Mikhail Sokolov, 2011. "A Note on Indices of Return," EUSP Department of Economics Working Paper Series Ec-02/11, European University at St. Petersburg, Department of Economics, revised 21 Feb 2011.

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    More about this item

    Keywords

    voluntary; regulation; energy; climate change;
    All these keywords.

    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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