Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/118047 
Year of Publication: 
2003
Series/Report no.: 
Nota di Lavoro No. 36.2003
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
The paper analyzes the welfare properties of voluntary agreements (VA) with polluters, when they are obtained under the legislative threat of an alternative stricter policy option. In the model, the threat is an abatement quota. Both the threat and its probability of implementation are endogenous. The latter is the outcome of a rent-seeking contest between a green and a polluter lobby group influencing the legislature. We show that a welfare-improving VA systematically emerges in equilibrium and that it is more efficient than the pollution quota. We also discuss various VA design aspects.
Subjects: 
Environmental policy
voluntary agreements
bargaining
legislatures
rent seeking
rent-seeking contests
JEL: 
D72
Q28
Document Type: 
Working Paper

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