Everyone agrees that firms should obey the law. But beyond what the law requires-beyond bare compliance with regulations-do firms have additional social responsibilities to commit resources voluntarily to environmental protection? How should we think about firms sacrificing profits in the social interest? Are they permitted to do so, given their fiduciary responsibilities to their shareholders? Even if permissible, is the practice sustainable, or will the competitive marketplace render such efforts and their impacts transient at best? Furthermore, is the practice, however well intended, an efficient use of social and economic resources? And, as an empirical matter, to what extent do firms already behave this way? Until now, public discussion has generated more heat than light on both the normative and positive questions surrounding corporate social responsibility (CSR) in the environmental realm. In Environmental Protection and the Social Responsibility of Firms, some of the nation s leading scholars in law, economics, and business examine commonly accepted assumptions at the heart of current debates on corporate social responsibility and provide a foundation for future research and policymaking.
Review: "The 1997 Kyoto Conference introduced emissions trading as a new policy instrument for climate protection. Bringing together scholars in the fields of economics, political science, and law, this book provides a description, analysis, and evaluation of different aspects of emissions trading as an instrument to control greenhouse gases. The authors analyse theoretical aspects of regulatory instruments for climate policy, provide an overview of US experience with market-based instruments, draw lessons from existing trading schemes for the control of greenhouse gases, and discuss options for emissions trading in climate policy. They also highlight the background of climate policy and instrument choice in the USA and Europe, and of the emerging new systems in Europe, particularly the new EU directive for a CO[subscript 2] emissions trading system."–Jacket.
Market failures associated with environmental pollution interact with market failures associated with the innovation and diffusion of new technologies. These combined market failures provide a strong rationale for a portfolio of public policies that foster emissions reduction as well as the development and adoption of environmentally beneficial technology. Both theory and empirical evidence suggest that the rate and direction of technological advance is influenced by market and regulatory incentives, and can be cost-effectively harnessed through the use of economic-incentive based policy. In the presence of weak or nonexistent environmental policies, investments in the development and diffusion of new environmentally beneficial technologies are very likely to be less than would be socially desirable. Positive knowledge and adoption spillovers and information problems can further weaken innovation incentives. While environmental technology policy is fraught with difficulties, a long-term view suggests a strategy of experimenting with policy approaches and systematically evaluating their success.
We develop and apply a new method for estimating the economic benefits of an environmental amenity. The method is based upon the notion of estimating the derived demand for a privately traded option to utilize an open access good. In particular, the demand for state fishing licenses is used to infer the benefits of recreational fishing. Using panel data on state fishing license sales and prices for the continental United States over a 15-year period, combined with data on substitute prices and demographic variables, a license demand function is estimated with instrumental variable procedures to allow for the potential endogeneity of administered prices. The econometric results lead to estimates of the benefits of a fishing license, and subsequently to the expected benefits of a recreational fishing day. In contrast with previous studies, which have utilized travel cost or hypothetical market methods, our approach provides estimates that are directly comparable across geographic areas. Our findings show substantial variation in the value of a recreational fishing day across geographic areas in the United States. This suggests that current practice of using benefits estimates from one part of the country in national or regional analyses may lead to substantial bias in benefits estimates.