EconPapers    
Economics at your fingertips  
 

Costly Enforcement of Voluntary Environmental Agreements with Industries

David McEvoy () and John Stranlund ()

No 2007-11, Working Papers from University of Massachusetts Amherst, Department of Resource Economics

Abstract: Although the theoretical literature on the performance of voluntary approaches to environmental protection has progressed quite far in the last decade, no one has rigorously addressed the obvious point that even voluntary emissions control policies must be enforced. This paper examines the consequences of the need for costly enforcement of voluntary environmental agreements with industries on the ability of these agreements to meet regulatory objectives, the levels of industry participation with these agreements, and the relative efficiency of voluntary and regulatory approaches. We find that enforcement costs that are borne by the members of a voluntary emissions control agreement limit the circumstances under which an agreement can form in place of an emissions tax. However, if an agreement does form, member-financed enforcement induces greater participation than if compliance with the agreement could be enforced without cost to its members. Moreover, a voluntary emission control agreement with an industry can be a more efficient way to achieve an environmental quality objective than an emission tax, but only if: (1) the members of an agreement bear the costs of enforcing compliance with the agreement; (2) there exists member-financed agreements that reach the government’s environmental quality target while leaving the members of the agreement at least as well off as they would be under an emissions tax, and (3) the enforcer of the agreement has a significantly better monitoring technology or a higher sanction available to it than the government.

Keywords: Voluntary agreements; self-enforcing agreements; emissions tax; enforcement (search for similar items in EconPapers)
JEL-codes: L51 Q58 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2007-10
New Economics Papers: this item is included in nep-agr, nep-env and nep-reg
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://courses.umass.edu/resec/workingpapers/docum ... kingPaper2007-11.pdf (application/pdf)

Related works:
Working Paper: Costly Enforcement of Voluntary Environmental Agreements with Industries (2007) Downloads
Working Paper: Costly Enforcement of Voluntary Environmental Agreements with Industries (2007) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:dre:wpaper:2007-11

Access Statistics for this paper

More papers in Working Papers from University of Massachusetts Amherst, Department of Resource Economics
Bibliographic data for series maintained by Eileen Keegan ().

 
Page updated 2021-02-17
Handle: RePEc:dre:wpaper:2007-11