The economic analysis of voluntary approaches to environmental protection. A survey

TitleThe economic analysis of voluntary approaches to environmental protection. A survey
Publication TypeWorking Paper
Year of Publication2004
AuthorsR. Brau, C. Carraro
Number2004_20
Abstract

This paper surveys the recent literature on voluntary (or negotiated) approaches as an environmental policy tool. Rather than adopting a positive perspective and describing different types of voluntary approaches (VAs) and their main features or their pros and cons, this survey focuses on the economic incentives for firms or industries to adopt VAs. The consequent role that VAs may play within a set of policy tools designed to address environmental problems is then assessed. A careful understanding of the economic incentives that induce a firm to sign a VA is indeed crucial to identify and design the policy mix that makes the VA both environmentally effective and economically efficient.

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