Hostname: page-component-586b7cd67f-dlnhk Total loading time: 0 Render date: 2024-11-24T18:42:38.341Z Has data issue: false hasContentIssue false
  • English
  • Français

Regulators and environmental groups: better together or apart?

Published online by Cambridge University Press:  09 March 2021

Ana Espinola-Arredondo ,
Eleni Stathopoulou  and
Felix Munoz-Garcia Open the ORCID record for Felix Munoz-Garcia [Opens in a new window]
Ana Espinola-Arredondo
Affiliation:
School of Economic Sciences, Washington State University, Pullman, WA, USA
Eleni Stathopoulou
Affiliation:
Department of Economics, Nottingham Business School, Nottingham Trent University, Nottingham, UK
Felix Munoz-Garcia*
Affiliation:
School of Economic Sciences, Washington State University, Pullman, WA, USA
*
*Corresponding author. [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper examines green alliances between environmental groups (EGs) and polluting firms, which have become more common in the last decades, and analyzes how they affect policy design. We first show that the activities of regulators and EGs are strategic substitutes, giving rise to free-riding incentives on both agents. Nonetheless, the presence of the EG yields smaller welfare benefits when firms are subject to regulation than when they are not. In addition, the introduction of environmental policy yields large welfare gains when the EG is absent but small benefits when the EG is already present.

Keywords

abatementenvironmental groupsgreen alliancesenvironmental policystrategic substituteswelfare gains

JEL classification

Q58: Government Policy H23: Externalities • Redistributive Effects • Environmental Taxes and Subsidies L12: Monopoly • Monopolization Strategies
Type
Research Article
Information
Environment and Development Economics , Volume 27 , Issue 1 , February 2022 , pp. 40 - 66
Copyright
Copyright © The Author(s) 2021. Published by Cambridge University Press

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aidt, TS (1998) Political internalization of economic externalities and environmental policy.. Journal of Public Economics 69, 1–16.CrossRefGoogle Scholar
Arts, B (2002) Green alliances of business and NGOs. New styles of self-regulation or dead-end roads? Corporate Social Responsibility and Environmental Management 9, 26–36.CrossRefGoogle Scholar
Baron, DP (2012) The industrial organization of private politics.. Quarterly Journal of Political Science 7, 135–174.CrossRefGoogle Scholar
Baron, DP and Diermeier, D (2007) Strategic activism and nonmarket strategy.. Journal of Economics & Management Strategy 16, 599–634.Google Scholar
Bendell, J and Murphy, DF (2000) Planting the seeds of change: business–NGO relations on tropical deforestation. In Bendell, J (eds), Terms of Endearment. Business, NGOs and Sustainable Development. Sheffield: Greenleaf, pp. 65–78.Google Scholar
Bottega, L and De Freitas, J (2009) Public, private and nonprofit regulation for environmental quality. Journal of Economics and Management Strategy 18, 105–123.Google Scholar
Egorov, G and Harstad, B (2017) Private politics and public regulation. The Review of Economic Studies 84, 1652–1682.Google Scholar
Fischer, C and Lyon, TP (2014) Competing environmental labels.. Journal of Economics and Management Strategy 23, 692–716.CrossRefGoogle Scholar
Fredriksson, P (1997) The political economy of pollution taxes in a small open economy. Journal of Environmental Economics and Management 33, 44–58.CrossRefGoogle Scholar
Fredriksson, PG, Neumayer, E, Damania, R and Gates, S (2005) Environmentalism, democracy, and pollution control. Journal of Environmental Economics and Management 49, 343–365.CrossRefGoogle Scholar
Friehe, T (2013) The role of investment in environmental lobbying contests. Environmental and Resource Economics 56, 337–352.CrossRefGoogle Scholar
Glasbergen, P and Groenenberg, R (2001) Environmental partnerships in sustainable energy. European Environment 11, 1–13.CrossRefGoogle Scholar
Harbaugh, R, Maxwell, JW and Roussillon, B (2011) Label confusion: the Groucho effect of uncertain standards. Management Science 57, 1512–1527.CrossRefGoogle Scholar
Hartman, C and Stafford, E (1997) Green alliances: building new business with environmental groups. Long Range Planning 30, 184–196.CrossRefGoogle Scholar
Heijnen, P (2013) Informative advertising by an environmental group.. Journal of Economics 108, 249–272.CrossRefGoogle Scholar
Heijnen, P and Schoonbeek, L (2008) Environmental groups in monopolistic markets. Environmental and Resource Economics 39, 379–396.CrossRefGoogle Scholar
Heyes, AG and Maxwell, JW (2004) Private vs. public regulation: political economy of the international environment. Journal of Environmental Economics and Management 48, 978–996.CrossRefGoogle Scholar
Heyes, A and Oestreich, AM (2018) A theory of social license when regulatory pressure is jointly produced by an EPA and an NGO.. Journal of Regulatory Economics 54, 219–243.CrossRefGoogle Scholar
Innes, R (2006) A theory of consumer boycotts under symmetric information and imperfect competition. The Economic Journal 116, 355–381.CrossRefGoogle Scholar
Jaffe, A, Newell, N and Stavins, R (2002) Environmental policy and technological change. Environmental and Resource Economics 22, 41–70.CrossRefGoogle Scholar
Kolk, A (2000) Economics of Environmental Management. Edinburgh: Pearson.Google Scholar
Laffont, JJ and Tirole, J (1996) Pollution permits and environmental innovation. Journal of Public Economics 62, 127–140.CrossRefGoogle Scholar
Liston-Heyes, C (2001) Setting the stakes in environmental contests. Journal of Environmental Economics and Management 41, 1–12.CrossRefGoogle Scholar
Livesey, SM (1999) McDonald's and the environmental defense fund: a case study of a green alliance. The Journal of Business Communication 36, 5–39.CrossRefGoogle Scholar
Nelson, J (2017) Partnerships for sustainable development: collective action by business, governments and civil society to achieve scale and transform markets. Business and Sustainable Development Commission, and Corporate Responsibility Initiative, Harvard Kennedy School. Available at http://s3.amazonaws.com/aws-bsdc/PartnershipsforSD.pdf.Google Scholar
Riddel, M (2003) Candidate eco-labeling and senate campaign contributions. Journal of Environmental Economics and Management 45, 177–194.CrossRefGoogle Scholar
Rondinelli, DA and London, T (2003) How corporations and environmental groups cooperate: assessing cross-sector alliances and collaborations. The Academy of Management Executive 17, 61–76.Google Scholar
Seitanidi, MM and Crane, A (2013) Social Partnerships and Responsible Business: A Research Handbook. New York, NY: Routledge Publishers.CrossRefGoogle Scholar
Stafford, ER, Polonsky, MJ and Hartman, CL (2000) Environmental NGO–business collaboration and strategic bridging: a case analysis of the Greenpeace–Foron Alliance. Business Strategy and the Environment 9, 122–135.3.0.CO;2-C>CrossRefGoogle Scholar
Stathopoulou, E and Gautier, L (2019) Green alliances and the role of taxation. Environmental and Resource Economics 74, 1189–1206.CrossRefGoogle Scholar
van der Made, A (2014) Information provision by interest groups. Environmental and Resource Economics 58, 649–664.CrossRefGoogle Scholar
van der Made, A and Schoonbeek, L (2009) Entry facilitation by environmental groups. Environmental and Resource Economics 43, 457–472.CrossRefGoogle Scholar
Yaziji, M and Doh, J (2009) NGOs and Corporations: Conflict and Collaboration. Cambridge, UK: Cambridge University Press.CrossRefGoogle Scholar