Chemical Manufacturers Association, Washington DC 1997 Advertising campaign case study
“Voluntary” Approaches to Environmental Regulation: A Survey
Thomas P. Lyon tlyon@indiana.edu and
John W. Maxwell jwmax@indiana.edu Kelley School of Business
Indiana University
Bloomington IN 47405-1701
____________________________________
Forthcoming in Environmental Economics: Past, Present and Future, edited by Maurizio Franzini and Antonio
Nicita; Aldershot, Hampshire: Ashgate Publishing Ltd., forthcoming May 1999.
1
1. Introduction
In the 1970s and 1980s most developed nations created a host of new regulations aimed at curbing environmental degradation. The approach taken was typically one of “command and control,” which specified in law the standards to be met, often in the form of specific technologies that had to be adopted. Industry fought these new regulations vigorously in many cases, and was repeatedly surprised by the political effectiveness of environmental activists. From the beginning, command-and-control regulation had been criticized by economists for its costliness and inflexibility, and by the late 1980s market-based instruments for environmental regulation---especially emissions-trading programs---became increasingly common. One of the most striking environmental developments of the 1990s, however, goes beyond even this type of environmental regulation. Under the emerging “voluntary approach" to pollution abatement, firms make commitments to improve their environmental performance above and beyond the level required by law. The purpose of this survey is to make sense of this new and rapidly spreading phenomenon. We begin, in section 2, with an overview of the types of voluntary programs in existence throughout the United
States and Europe. Even a cursory examination reveals that these programs differ significantly amongst themselves, and that the threat of traditional regulation often lurks nearby. In section 3 we present an intellectual framework in which these plans can be understood without ignoring their
Thomas P. Lyon tlyon@indiana.edu and
John W. Maxwell jwmax@indiana.edu Kelley School of Business
Indiana University
Bloomington IN 47405-1701
____________________________________
Forthcoming in Environmental Economics: Past, Present and Future, edited by Maurizio Franzini and Antonio
Nicita; Aldershot, Hampshire: Ashgate Publishing Ltd., forthcoming May 1999.
1
1. Introduction
In the 1970s and 1980s most developed nations created a host of new regulations aimed at curbing environmental degradation. The approach taken was typically one of “command and control,” which specified in law the standards to be met, often in the form of specific technologies that had to be adopted. Industry fought these new regulations vigorously in many cases, and was repeatedly surprised by the political effectiveness of environmental activists. From the beginning, command-and-control regulation had been criticized by economists for its costliness and inflexibility, and by the late 1980s market-based instruments for environmental regulation---especially emissions-trading programs---became increasingly common. One of the most striking environmental developments of the 1990s, however, goes beyond even this type of environmental regulation. Under the emerging “voluntary approach" to pollution abatement, firms make commitments to improve their environmental performance above and beyond the level required by law. The purpose of this survey is to make sense of this new and rapidly spreading phenomenon. We begin, in section 2, with an overview of the types of voluntary programs in existence throughout the United
States and Europe. Even a cursory examination reveals that these programs differ significantly amongst themselves, and that the threat of traditional regulation often lurks nearby. In section 3 we present an intellectual framework in which these plans can be understood without ignoring their
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