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Community pressure for green behavior

Anthony Heyes () and Sandeep Kapur

Journal of Environmental Economics and Management, 2012, vol. 64, issue 3, 427-441

Abstract: The desire to avoid rousing community hostility may encourage firms to behave in an environmentally responsible manner. Firms may engage in corporate social responsibility (CSR) to maintain community support and/or to regain the support of a community where it has been lost. It has been conjectured that such ‘informal regulation’ could effectively replace formal intervention in some settings, and usefully complement it in others. We explore these conjectures with mixed results. Informal regulation is necessarily less efficient than a well-designed formal alternative and the pattern of green behavior induced by the threat of community hostility may increase or decrease welfare. The existence of community pressure may increase or decrease the optimal calibration of a formal intervention (in this case an environmental tax) and may complement or detract from the incentives generated by an optimally calibrated tax.

Keywords: Community pressure; Informal regulation; Corporate social responsibility (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:64:y:2012:i:3:p:427-441

DOI: 10.1016/j.jeem.2012.04.006

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Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates

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