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Voluntary Approaches in Climate Policy. Magali Delmas & Janice Mazurek. OUTLINE. The possible role of voluntary approaches (VAs) in climate policy Definitions Why do firms and the regulator participate? Effectiveness and efficiency of VAs Applications, case studies

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voluntary approaches in climate policy

Voluntary Approaches in Climate Policy

Magali Delmas & Janice Mazurek

outline
OUTLINE
  • The possible role of voluntary approaches (VAs) in climate policy
  • Definitions
  • Why do firms and the regulator participate?
  • Effectiveness and efficiency of VAs
  • Applications, case studies
  • Conclusions on the actual role of VAs
1 the possible role of vas
1. The possible role of VAs
  • VAs are not new (John Muir’s Sierra Club 1892)
  • We all make voluntary efforts to reduce our environmental impacts, with little effect
  • Better results if firms participate in efforts
  • Better results if authorities promote and encourage voluntary efforts
  • VAs are the fastest growing type of environmental instrument in recent years (OECD 2003)
  • In some cases, they are the only instrument for climate protection (USA)
2 1 definition
2.1 Definition
  • VA = any effort to reduce environmental impacts that go beyond what is imposed by regulation or what is cost-minimizing in the face of economic instruments
  • Types:
    • Self regulation
    • Negotiated agreements (NAs)
    • Public voluntary programs (PVPs)
2 3 further distinctions
2.3 Further distinctions
  • Do firms undertake voluntary abatement alone or jointly?
  • What type of compensation or incentive is offered by the regulator?
  • Is abatement costly in the net or not (‘no regret actions’)?
  • What are the motives for participation?
2 4 distinctive features of vas
2.4 Distinctive features of VAs
  • Co-operation with the regulator
  • There must be an interest, material or ideal,for polluters to make an effort
  • VAs are flexible
  • Co-ordination among polluters
3 1 why do firms participate
3.1 Why do firms participate ?
  • Direct financial gain, win-win, no regrets action (chaps 3 & 10)
  • Subsidies or tax rebates (chaps 3, 6, 13, 14 & 15)
  • Exemption from regulation, regulatory relief (chap. 11)
  • To prevent restrictive regulation or tax (chaps. 3-8 &14)
  • Collective learning (chaps 5, 10 &12)
  • To improve environmental reputation (chaps 4, 5 & 10)
  • Strategic move (chaps 4 & 5)
  • Stewardship (chap. 2)
3 2 why does the regulator participate
3.2 Why does the regulator participate ?
  • VAs are less efficient than other instruments, but those other instruments are not available: Lyon & Maxwell (chap. 6)
  • Regulator is not sure Parliament would accept constraining regulation: Langpap & Wu (chap. 7)
  • Parliament or citizens may prefer VAs, which they consider more participative and less costly: Grepperud & Pedersen (chap. 8)
4 1 effectiveness and efficiency of vas
4.1 Effectiveness and efficiency of VAs
  • Effectiveness = impact on emissions. Survey of literature and experiences by Khanna & Ramirez (chap. 2). Difficulty: what is the baseline?
  • Efficiency = (1) total cost minimizing amount of abatement, (2) least cost abatement. Survey by Segerson & Roti Jones (chap. 3)
4 2 specific problems
4.2 Specific problems
  • Trade-off between effectiveness of VAs and market competition: Brau & Carraro (chap. 4)
  • Same problem with imperfect information and incomplete contracts; e.g. VAs are signals of abatement costs to regulator or of environmental quality to customers: Cavaliere (chap. 5)
5 1 applications case studies
5.1 Applications, case studies
  • Long term agreements in the Netherlands: Glasbergen (chap. 9)
  • Green Lights and Energy Star Office in the USA: Howarth, Haddad & Paton (chap. 10)
  • Programme XL in the USA: Delmas & Mazurek (chap. 11)
5 2 applications case studies
5.2 Applications, case studies
  • Production and product regulation in the EU: Albrecht (chap. 12)
  • Climate Change Levy Agreements in the UK: de Muizon & Glachant (chap. 13)
  • CO2 law in Switzerland: Baranzini, Thalmann & Gonseth (chap. 14)
  • Energy agreements in Denmark: Bjørner (chap. 15)
6 conclusions on the role of vas
6. Conclusions on the role of VAs
  • What is special about climate change ?
  • Do not expect too much of VAs
  • VAs are useful in early stage
  • They should be part of policy mix
6 1 what is special about climate change
6.1 What is special about climate change?
  • The uncertainty about abatement costs and consequences of warming is so great, that constraining measures are hardly acceptable
  • Global and long term effects; no direct victims who could sue polluters
  • Many polluters, many non-point sources
6 2 do not expect too much of vas
6.2 Do not expect too much of VAs
  • Participation is greater when targets are energy or emissions intensities
  • They work fine as long as they are costless (no regret)
  • In general VAs reach their targets, but those targets are not very demanding
  • They are costly to negotiate and implement (NAs with large polluters, PVP with small ones)
6 3 vas are useful in early stage
6.3 VAs are useful in early stage
  • In early stage of environmental policy, VAs are often the only possible choice because they are the most politically acceptable instrument
  • VAs can facilitate the preparation and implementation of more constraining instruments
  • They can create support for those instruments
  • VAs can also delay the implementation of more constraining instruments
6 4 vas should be part of policy mix
6.4 VAs should be part of policy mix
  • Modern environmental policy combines diverse instruments in order to address the conflicting goals of efficiency and equity
  • VAs do not particularly increase the effectiveness or efficiency of policy mixes, but they can increase their acceptance and influence burden sharing
  • VAs are rather transitory measures that prepare the ground for more constraining instruments
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