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Anne-sarah Chiambretto and Hubert Stahn
''Voluntary agreements with Industries - participation incentives with industry-wide targets: a comment''
( 2011, Vol. 31 No.1 )
This comment reexamines the problem of free-riding in pre-emptive collective environmental voluntary agreements (VA) analysed by Dawson and Segerson in the context of VAs with a global emission target and a pigouvian tax used as a threat. Completely remaining in the authors' framework, we here reconsider their results about efficiency. While they claim it provides the optimal amount of environmental quality but inefficiently, we show that there exists an optimal threat under which the equilibrium of the game is a cost-effective VA. This result gives an additional indication on the way VAs should be used to be efficient.
Keywords: collective voluntary agreements, pollution control, adoption costs, political processes, distributional effects, diffuse pollution, government policy
JEL: Q5 - Environmental Economics: General
H3 - Fiscal Policies and Behavior of Economic Agents: General
Manuscript Received : Oct 30 2010 Manuscript Accepted : Jan 04 2011

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