OECD report questions voluntary agreements on environmental policy

The OECD that there are very few cases where such voluntary approaches to environmental policy have improved the environment.

Voluntary agreements may not even be efficient economically (courtesy ecarboot.net)

Voluntary agreements may not even be efficient economically (courtesy ecarboot.net)

Voluntary approaches are becoming increasingly popular and are supplementing, or replacing, other policy tools such as regulations, taxes and tradable permits.

The OECD has also raised doubts about the economic efficiency of such agreements because the cost of achieving additional improvements differ considerably between polluters. This, the organisation says, is partly due to environmental targets being set for individual firms or sectors, rather than at a national level.

Building on a number of new case studies, the focus of the analysis is both on voluntary approaches used in isolation and on such approaches used as part of “policy mixes”. It shows that combining a voluntary approach with a tax or tradable permit system can trigger significant additional administrative costs.

If too few resources are spent in the preparation, negotiation and enforcement, the environmental impacts are likely to be very modest, the OECD says.

In addition, where voluntary approaches are used in a policy mix, the environmental impacts of the other instrument can be weakened considerably.


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