The Roles of Environmental Groups in Economics

Laura Grant and Christian Langpap

Review of Environmental Economics and Policy, 2024, vol. 18, issue 2, 234 - 256

Abstract: Environmental groups play independent and pivotal functions in economic outcomes. Total revenues of US groups have matched or exceeded the EPA’s budget for all but one year since 2007 and outpaced its growth by more than 1 percent per year. We review the relevant literature, classifying it into four key roles: (1) provision of information, (2) public politics, (3) private politics, and (4) provision of environmental public goods. The groups provide information about products and environmental impacts, which influences consumer, government, and industry decisions. Environmental groups’ monitoring and enforcement affect regulatory decisions and compliance outcomes, with evidence that they both encourage and displace government actions. Groups directly engage firms through boycotts, protests, and other forms of social pressure. Finally, environmental groups conserve land, improve water quality, and provide environmental public goods. However, the environmental economics literature is lagging on understanding their role. We conclude with several avenues to spur further research.

Date: 2024
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