Voluntary Emission Reductions, Social Rewards, and Environmental Policy

Michael Rauscher ()

No 1838, CESifo Working Paper Series from CESifo

Abstract: Social norms and intrinsic motivations lead to environmentally friendly behaviour even in the absence of environmental policy. This paper looks at the interactions of social norms and environmental regulation in their impact on individual behaviour. People obtain social rewards for voluntary abatement efforts. These social rewards may be crowded out by environmental regulation taking the shape of standards or taxes. Moreover, the paper shows that environmental externalities and externalities related to social norms interact and that an optimal environmental policy should consider both types of externalities. From a general welfare point of view, emission taxes are superior to emission standards, but people responsive to social rewards prefer standards.

Date: 2006
New Economics Papers: this item is included in nep-ene, nep-env and nep-pbe
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1838

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