ABSTRACT:
Can businesses voluntarily adopt progressive environmental policies? Most environmental regulations are based on the assumption that the pursuit of profit leads firms to pollute the environment, and therefore governments must impose mandatory regulations. However, new instruments such as voluntary programs are increasingly important. Drawing on the economic theory of club goods, this book offers a theoretical account of voluntary environmental programs by identifying the institutional features that influence conditions under which programs can be effective. By linking program efficacy to club design, it focuses attention on collective action challenges faced by green clubs. Several analytic techniques are used to investigate the adoption and efficacy of ISO 14001, the most widely recognized voluntary environmental program in the world. These analyses show that, while the value of ISO 14001's brand reputation varies across policy and economic contexts, on average ISO 14001 members pollute less and comply better with governmental regulations.
This excellent and well-researched study provides a valuable resource for scholars and practitioners in determining how to adjust our regulatory and other strategies to the demands of a new and more challenging era of environmental problem-solving."
Daniel J. Fiorino, American University
"When do firms choose to follow voluntary environmental standards? Why do they apparently seek less freedom to pollute? Using the theory of green clubs and evidence from ISO 14001, Prakash and Potoski help resolve these policy mysteries. The Voluntary Environmentalists should interest readers concerned with finding innovative ways to improve environmental performance."
James T. Hamilton, Duke University
