Voluntary Agreements under Endogenous Legislative Threats

Matthieu Glachant

No 2003.36, Working Papers from Fondazione Eni Enrico Mattei

Abstract: The paper analyzes the welfare properties of voluntary agreements (VA) with polluters, when they are obtained under the legislative threat of an alternative stricter policy option. In the model, the threat is an abatement quota. Both the threat and its probability of implementation are endogenous. The latter is the outcome of a rent-seeking contest between a green and a polluter lobby group influencing the legislature. We show that a welfare-improving VA systematically emerges in equilibrium and that it is more efficient than the pollution quota. We also discuss various VA design aspects.

Keywords: Environmental policy; voluntary agreements; bargaining; legislatures; rent seeking; rent-seeking contests (search for similar items in EconPapers)
JEL-codes: D72 Q28 (search for similar items in EconPapers)
Date: 2003-04
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2003.36

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