Enforcing voluntary agreements for environmental protection: A theoretical and experimental analysis

2007 2007

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Abstract (summary)

Voluntary agreements are increasingly being considered as viable alternatives to more traditional forms of environmental management. Although the economic literature on voluntary approaches to environmental protection has progressed quite far in the last decade, no one has rigorously addressed the fact that compliance with voluntary agreements must be enforced. This body of work directly addresses this issue by examining the consequences of the need for member-financed enforcement of compliance on the performance of voluntary agreements for environmental protection.

In the first chapter, I examine the impact of including costly monitoring of compliance within a theoretical model of a self-enforcing international environmental agreement (IEA). I find that although monitoring costs limit the circumstances under which international cooperation to protect the environment is worthwhile, when IEAs do form they will involve greater participation than IEAs that do not require costly monitoring. Consequently, costly monitoring of IEAs is associated with higher international environmental quality.

The second chapter develops a theoretical model to compare the properties of a voluntary agreement made between a government and an industry with a traditional emissions tax, when compliance is costly to enforce. I find that a voluntary agreement can be a more efficient way to achieve an environmental quality objective over an emission tax, but only if (1) profitable agreements exist; (2) members bear the cost of enforcement, and (3) the enforcer of the agreement has a significant advantage in enforcement technologies compared to the government.

In the final chapter, a set of provision point experiments are used to empirically test the major theoretical conclusions of the first chapter. I find that, contrary to what the theory predicts, member-financed enforcement of compliance actually reduces the overall provision of the public good. This result is entirely due to the fact that members of stable coalitions only profit if all members fully comply with their commitments, and therefore, cooperative coalitions to provide a public good completely collapse with any positive level of noncompliance. Finally, I show that requiring all members to participate within an agreement that is costly to enforce can significantly increase the overall provision of the public good.

Indexing (details)

Environmental protection;
0501: Economics
0511: Economic theory
Identifier / keyword
Social sciences; Environmental economics; Environmental protection; Experimental economics; International environmental agreements; Voluntary agreements
Enforcing voluntary agreements for environmental protection: A theoretical and experimental analysis
McEvoy, David M.
Number of pages
Publication year
Degree date
School code
DAI-A 68/11, Dissertation Abstracts International
Place of publication
Ann Arbor
Country of publication
United States
Stranlund, John K.
Committee member
Baker, Erin; Murphy, James J.; Spraggon, John
University of Massachusetts Amherst
Resource Economics
University location
United States -- Massachusetts
Source type
Dissertations & Theses
Document type
Dissertation/thesis number
ProQuest document ID
Database copyright ProQuest LLC; ProQuest does not claim copyright in the individual underlying works.
Document URL
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