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PART III VOLUNTARY MEASURES IN THE PRIVATE SECTOR
Introduction hapters 13-20 focus on the private sector and the use of new tools to influence the behavior of corporations. The most prominent of these new approaches, and the focus of seven of the eight chapters, are volun- tary agreements undertaken either between firms and governments or among firms without direct government participation. These voluntary agreements take many forms, varying in who participates, how they are organized, and what is expected of participants. Indeed, one contribution of the chapters in this section is that they map the diverse terrain that falls under the general heading of voluntary agreements, contrasting different forms with each other and examining the relationship between voluntary measures and command- and-control regulation. We should note at the outset that the scope of our examination is focused on the United States. Although several chapters draw on the experience of other nations and Harrison reviews some Canadian programs similar to the most visible U.S. programs, the majority of the discussion is based on the U.S. experience. As we argue in Chapter 20, the time has come to develop more comparative analyses of voluntary measures. But we limit our scope to the United States in part because there is more research on U.S. initiatives than on those in any other nation (though this is changing quickly) and because we hope that the analyses presented here will be of value to those designing and evaluating voluntary programs in the United States. In addition, because of the unusual legal and policy context in the United States, particularly the major role of adversarial processes in environmental policy, the relevance of other countries' experiences to the U.S. case should not be taken for granted. A robust comparative literature can provide useful guidance to policy, but until that literature emerges and this 215
216 INTRODUCTION issue of transferability across political systems is thought through, the U.S. expe- rience provides the best guidance to the design of U.S. programs. The introduc- tion of a comparative literature on voluntary agreements is beginning to appear (tenBrink, 2002~. Three themes emerge across the chapters that follow. One is the potential for firms to "free-ride." A firm that does not participate in a voluntary program when many of its peers in the same industry do might receive many of the public relations and goodwill benefits of the program without the costs of reducing environmental impact. Or a firm may sign on, but do little to change its behav- ior. The problem of free-riders, or more generally the contrast between altruism and narrowly self-interested behavior, is a central topic for the social sciences and is frequently engaged in the analyses that follow. A second common theme is that firms are embedded in networks of suppliers, customers, investors, and competitors, and also embedded in the communities where they are located. These networks are very consequential for a firm's decisions with regard to environmental protection, as will be noted repeatedly in this section. The third theme is that voluntary programs have indirect effects on organizational culture and practices as well as more direct effects on targeted environmental impacts. In the long term, these changes in firms may be even more important than short- term reductions in environmental impact. The section begins with a survey by Mazurek (Chapter 13) of the kinds of voluntary agreements that have been brokered among individual firms, industry associations and the U.S. federal government. She reviews what has been learned from the U.S. Environmental Protection Agency's (EPA's) Green Lights, 33/50, and Project XL programs. These are the largest voluntary programs in the United States. Some suggest they are also among the most successful. They are cer- tainly the most carefully examined. But as will be evident throughout this section, careful research on who participates in voluntary agreements, why they participate, what participants do, and what the overall effects are is just begin- ning to emerge. There are more questions at this point than careful scholarship to answer the questions. Nash (Chapter 14) examines the causes and effects of voluntary codes of environmental conduct that are established by networks and formal associations of private firms. These include the American Chemistry Council's Responsible Care initiative and related efforts by other parts of the chemical industry, as well as programs by the National Paint and Coatings Association, the American Petroleum Institute, the American Forest & Paper Association, and the American Textile Manufacturers Association. Her analysis considers who adopts such codes, how effective they have been, and what factors might enhance or retard their impact. Herb, Helms, and Jensen (Chapter 15) focus on another form of "new tool" community "right-to-know" (RTK) policies. In the United States the most important RTK effort is the Toxics Release Inventory, which requires man-
VOLUNTARY MEASURES IN THE PRIVATE SECTOR 217 ufacturing plants to report to the federal government their environmental releas- es of toxic chemicals. The EPA in turn, makes this information available to the public. The TRI is not a voluntary program compliance is mandatory. But, as Herb and colleagues argue, it can lead to changes in organizational behavior as a part of increased awareness of the firms themselves, the public, and even the investment community. Harrison (Chapter 16) considers the problem of evaluating voluntary pro- grams, drawing on both U.S. and Canadian examples. She notes that the first assessments offered of programs may not adequately control for factors other than the voluntary program that might have led to firms reducing their environ- mental impact. Accurate assessment of programmatic impacts will require care- ful thinking about the proper measures of program effects, about the appropriate basis for comparison, and about the many factors that can influence corporate environmental behavior. Fortunately, problems of evaluation methodology are not unique to voluntary programs. A substantial and sophisticated literature on program evaluation can provide guidance to future research on this topic. As noted, voluntary codes are subject to the problem of free-riders and require coordinated action among a network of actors. Furger (Chapter 17) draws on the theories of collective action and networks as well as on case studies to develop hypotheses regarding why firms might participate in voluntary codes. He also argues that some aspects of voluntary agreements that have been subject to criticism that they are too vague or generic and reduce accountability may be features essential for their long-term effectiveness. Prakash (Chapter 18) examines both external and internal factors that may facilitate or retard effective participation in voluntary measures. The theory of collective goods provides a basis for hypothesizing about the incentive structure faced by firms. Prakash reminds us that whatever other motivations may weigh in corporate decision making, profits and the balancing of economic costs and benefits always will be important. Randall (Chapter 19) adds to this discussion by considering the role of gov- ernment that influences participation in voluntary measures. As rational actors, firms will anticipate government actions, and voluntary measures may be adopt- ed to avoid regulations that are perceived as more onerous. He reviews some recent theoretical analyses that elucidate the effects that monitoring, enforce- ment, and other factors can have on compliance with voluntary and regulatory measures and offers some tentative conclusions. In the final chapter of this section, Dietz (Chapter 20) extracts some themes and lessons from the other chapters. It is clear that care must be taken in evalu- ating voluntary measures and that sophisticated tools exist to aid in this task. Understanding participation in voluntary measures will require an integrated ap- proach to corporate behavior that takes account of strategic rational action, the networks in which firms are embedded, and the multiple actors and concerns involved in making organizational decisions. Finally, although this volume
218 INTRODUCTION focuses on the United States, it is clear that further work must become increas- ingly comparative both because such comparisons facilitate understanding of voluntary measures within the United States and because corporate action and voluntary measures are increasingly global in scope. Voluntary measures are seen by many as an exciting new approach to envi- ronmental policy. The chapters that follow review the best research available on voluntary measures. To some who support voluntary measures, these chapters may be sobering. The experiments to date may not have accomplished as much as is sometimes claimed. But there is a hopeful message that is even more important. Both practical experience and theory provide a much broader reper- toire of ideas for designing environmental policy than was the case a decade ago. Furthermore, the chapters in this section demonstrate that a community of re- searchers is emerging who are providing the scientific basis for understanding voluntary policies so that new initiatives can build on both practical experience and rigorous analysis. REFERENCE tenBrink, P. 2002 Voluntary Environmental Agreement: Process, Practice, and Future Use. Shefield, Eng.: Greenleaf Publishing.