Negotiated agreements are no free-market instrument of environmental poliey. - A trend towards "softer" regulation, especially in the form of negotiated environmental agreements,is observable in national and international environmental policies. Such agreements are controversial,
because there are fears that government will relinquish its responsibility for environmental protection. Topical German examples that have prompted public debates include the takeback agreement for cars finalized earlier this year, the voluntary agreement made bya number of industries ona
CO2 -emissions reduction by the year 2005, and the voluntary agreement made by the automobile industry on the development of energy-efficient cars. Against this background the Centre for European Economic Research (ZEW) examined voluntary agreements in a study commissioned by the German Ministry
of Economics. The findings of the study are presented in this paper. Proponents of voluntary agreements argue that this instrument provides incentives to the business sec tor for the development of efficient, innovative and environmentally-friendly solutions. However, it is hard to detect
such solutions in the examples mentioned above. These agreements are unlikely to produce results that go beyond what industry would have done in any case and they avoid using economic incentives. Agreements are non-binding and unenforceable, with the negotiating process leadingto a watering
down of the environmental goals government had originally aimed at. A preference for negotiated solutions on principle, as currently espoused by the Federal Government in Germany, is "counterproductive". If the government clearly signals its wil/ingness to refrain from using regulatory
or economic instruments in favour of industry agreements, it weakens its negotiating position. The government also limits its options should the implementation of the agreement prove unsatisfactory. Government needs to be "in control" in order to leave its choice of policy instruments
open and to be flexible.
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Keywords:
CIRCULAR ECONOMY;
CLIMATE PROTECTION;
ECONOMIC INSTRUMENTS OF ENVIRONMENTAL POLICY;
NEGOTIATED AGREEMENTS
Document Type: Research Article
Publication date:
01 May 1996
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