Voluntary approaches to the environment, including negotiated environmental performance agreements with industry and public programs in which companies can voluntarily participate, are becoming increasingly popular in a number of countries. However, the OECD`s work calls into question its impact on the environment and its economic efficiency. Third, companies could play a strategic game with regulators. According to Segerson and Miceli (1998), companies are making voluntary wastewater reductions to avoid the introduction of mandatory controls deemed more costly for a certain level of reduction. Wu and Babcock (1999) add the possibility for the regulator to offer a positive incentive for cooperation, such as providing technical expertise in pollution reduction. If the regulator provides such a service at a lower cost than it can provide, the company has other reasons to join a voluntary agreement. The correction of externalities, as discussed so far in this chapter, has focused on government intervention in private markets through regulatory approaches such as taxation, authorities and standards. However, if the government works with objectives other than maximizing social welfare [Peltzman (1976)], there is no guarantee that state intervention will achieve social optimum. In addition, lipsey and Lancaster`s two best arguments (1956-1957) and the “double dividend” literature suggest that state intervention could reduce social welfare, even if the government`s objective is to improve well-being. It is therefore useful to consider other possible ways to achieve environmental protection. Two possibilities are voluntary environmental impact programs and the use of courts. Voluntary approaches to the environment: effectiveness, efficiency and use in policy dosages provide an in-depth assessment of the use of voluntary approaches, based on a series of new case studies and extensive research of available literature.
The analysis focuses on both voluntary approaches, which are isolated and used in policy dosages. The work studies the use of voluntary approaches in situations where alternative instruments could have been used. It notes that, although the environmental objectives of most voluntary approaches have been achieved, there are few instances where such approaches have contributed to environmental improvements that would have exceeded what would have been done anyway. The work also shows that the macroeconomic effectiveness of voluntary approaches is generally low, as they rarely include mechanisms to offset the costs of reducing borders between all polluters. It recognizes, however, that traditional “command and control policies” rarely offset mitigation costs and that voluntary approaches can offer greater economic efficiency than these policies by providing companies with greater flexibility in achieving environmental improvements. Voluntary environmental delivery is a tempting term. For many reasons, some companies seem to be doing on their own what they would have done in the past only under the threat of the law. As has already been said, one of the reasons for voluntary action may be the fear of stricter regulation. Corporate actions may be seen as experiences. After many years of actively rejecting many environmental requirements with limited success, some companies seem to be wondering if there are opportunities for entrepreneurship to be green. While some anecdotal evidence suggests that companies have increased their profits through improved environmental performance, other anecdotes suggest that these “win-win” chances are limited [Lyon and Maxwell (1999)]. Overall, the evidence here does not support the idea that polluters will systematically reduce their wastewater without government regulations and programs to encourage this behaviour.
Voluntary agreements on about