'Voluntary' Approaches to Environmental Regulation: A Survey

This article reviews the economic literature on voluntary approaches to environmental regulation. In the last few years there has been a rapid growth in the use of voluntary actions and programs to address environmental concerns. These approaches can be placed into three general categories: (1) Unilateral commitments by industrial firms, sometimes referred to as business-led corporate environmental programs, (2) Public voluntary schemes, in which participating firms agree to standards that have been developed by public bodies such as environmental agencies, and (3) Negotiated agreements created out of a dialogue between government authorities and industry, typically containing a target and a timetable for reaching that target. Negotiated agreements may take on the status of legally binding contracts if legislation empowers executive branches of government to sign them.