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.
The diffusion of voluntary agreements can be considered as the result of the innovation of environmental policies based on a new style of interaction between public and private actors. As the environmental problems complexity increases, an evolution of interaction model occurs.The literature on environmental policy innovation shows in a clear way that the use of voluntary agreements and their real capability to produce relevant effects are strictly linked to the innovation paths of environmental policies, policy styles and policy networks. In this paper we will focus our attention on the evolution of the model of interaction between public and economic actors as the key element to evaluate voluntary agreements' effectiveness in reaching policy targets.
This paper analyzes voluntary agreements (VA) between public agencies & polluting industries. It is shown that voluntary agreements provide gains both for governments & for industries relative to the use of emission licenses & can thus be seen as both rational & self-enforcing. The condition for this conclusion is that the regulator has preferences over labor participation rates due to the presence of layoff costs. The gains for both parties in signing an agreement are highest when the industry is one with high productivity, low wages, & low environmental costs, while the effects on gains differ across the two negotiating parties for high output elasticities with respect to emissions & labor. 2 Tables, 1 Figure, 1 Appendix, 14 References. Adapted from the source document.
In: Bekker , M P M , Mays , N , Helderman , J K , Petticrew , M , Jansen , M W J , Knai , C & Ruwaard , D 2018 , ' Comparative institutional analysis for public health : governing voluntary collaborative agreements for public health in England and the Netherlands ' , European Journal of Public Health , vol. 28 , pp. 19-25 . https://doi.org/10.1093/eurpub/cky158
Democratic institutions and state-society relations shape governance arrangements and expectations between public and private stakeholders about public health impact. We illustrate this with a comparison between the English Public Health Responsibility Deal (RD) and the Dutch 'All About Health.' (AaH) programme. As manifestations of a Whole-of-Society approach, in which governments, civil society and business take responsibility for the co-production of economic utility and good health, these programmes are two recent collaborative platforms based on voluntary agreements to improve public health. Using a 'most similar cases' design, we conducted a comparative secondary analysis of data from the evaluations of the two programmes. The underlying rationale of both programmes was that voluntary agreements would be better suited than regulation to encourage business and civil society to take more responsibility for improving health. Differences between the two included: expectations of an enforcing versus facilitative role for government; hierarchical versus horizontal coordination; big business versus civil society participants; top-down versus bottom-up formulation of voluntary pledges and progress monitoring for accountability versus for learning and adaptation. Despite the attempt in both programmes to base voluntary commitments on trust, the English 'shadow of hierarchy' and adversarial state-society relationships conditioned non governmental parties to see the pledges as controlling, quasi contractual agreements that were only partially lived up to. The Dutch consensual political tradition enabled a civil society-based understanding and gradual acceptance of the pledges as the internalization by partner organizations of public health values within their operations. We conclude that there are institutional limitations to the implementation of generic trust-building and learning-based models of change 'Whole-of-Society' approaches.
Various parties have expressed serious concerns regarding the effect of environmental taxes on innovation. The argument is that innovation and investment in emission-abatement technology frequently require capital for investment. Pollution taxes siphon working capital from firms, and new investment becomes more difficult and/or more costly if it is necessary to borrow the capital from banks. In recent years, voluntary agreements have gained increased popularity and have become a central instrument in several countries' environmental policies, the Netherlands perhaps being the most notable example. A core rationale behind voluntary agreements is that they permit collective targets to be set for the entire sector, allowing for a different pace of realization of energy-efficiency improvements among the various individual companies within a sector. This provides the flexibility for firms to set their own goals in a cost-effective manner and to use their own resources to innovate and effect changes in the manner which suits them best. It has been claimed that voluntary agreements provide an improved climate for innovation. How voluntary agreements rate with regard to innovation incentives relative to environmental taxes depends on several factors, in particular the specific design of the agreement and whether the agreements are renegotiated after the market penetration of new technology. The author claims that, whatever advantages voluntary agreements have over the traditional regulatory approach, which makes mandatory particular forms of behavior or specific technological approaches, it is difficult to see that agreements would provide better incentives for innovation. Incentives for innovation may be particularly poor if the regulator requests renegotiation of the agreement with the arrival of new technology that substantially changes marginal conditions. It is proposed that if the authorities for various reasons nevertheless choose to use voluntary agreements as instruments, the agreements should be designed to be incentive-based.
Abstract Environmental regulation and pollution control may clash against the presence of unverifiable tasks, like source-specific emissions. To tackle this issue, we reshape a voluntary agreement instrument, already available in the existing literature, from a dynamic perspective by means of a relational contracting approach. We define a Relational Voluntary Environmental Agreement (RVEA) in an N firms symmetric context, and show that even if emissions are not contractible across firms, and therefore enforcement cannot be delegated to a third party, if firms are sufficiently patient, a self-enforcing RVEA induces the achievement of the environmental objective. Finally, our welfare analysis reveals a notable result: our RVEA can imply less free riding and be welfare-improving with respect to a Voluntary Environmental Agreement enforced by a third party (along the lines of McEvoy, D. M., and J. K. Stranlund. 2010. "Costly Enforcement of Voluntary Environmental Agreements." Environmental and Resource Economics 47: 45–63).
We look at the consequences of allowing public health insurance (PuHI) to be voluntary when its coverage can be supplemented in the market. PuHI redistributes with respect to risk and income, and the market is affected by adverse selection. We argue that making PuHI voluntary does not lead to its collapse since individuals always participate in it. Additionally, in some cases, a voluntary PuHI scheme increases market efficiency because participation in it sends a signal to private insurers of an individual's health-risk type. The welfare consequences depend on the status quo. If in the status quo no political support exists for a compulsory PuHI, making it voluntary constitutes a Pareto improvement, and in some cases all individuals are strictly better off. If, instead, the status quo implements compulsory PuHI, making it voluntary then results in less redistribution. Adapted from the source document.