Voluntary Emission Reductions, Social Rewards, and Environmental Policy

29 Pages Posted: 24 Nov 2006

See all articles by Michael Rauscher

Michael Rauscher

University of Rostock - Department of Economics; University of Rostock - Faculty of Business Administration, Economics and Social Sciences; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: November 2006

Abstract

Social norms and intrinsic motivations lead to environmentally friendly behaviour even in the absence of environmental policy. This paper looks at the interactions of social norms and environmental regulation in their impact on individual behaviour. People obtain social rewards for voluntary abatement efforts. These social rewards may be crowded out by environmental regulation taking the shape of standards or taxes. Moreover, the paper shows that environmental externalities and externalities related to social norms interact and that an optimal environmental policy should consider both types of externalities. From a general welfare point of view, emission taxes are superior to emission standards, but people responsive to social rewards prefer standards.

JEL Classification: H3, Z13, Q28

Suggested Citation

Rauscher, Michael, Voluntary Emission Reductions, Social Rewards, and Environmental Policy (November 2006). CESifo Working Paper Series No. 1838, Available at SSRN: https://ssrn.com/abstract=946909

Michael Rauscher (Contact Author)

University of Rostock - Department of Economics ( email )

Ulmenstr. 69
Rostock, 18057
Germany

HOME PAGE: http://www.wiwi.uni-rostock.de/vwl

University of Rostock - Faculty of Business Administration, Economics and Social Sciences ( email )

Ulmenstr. 69
Rostock, 18057
Germany

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
166
Abstract Views
1,378
rank
224,366
PlumX Metrics