Article

Global Private Regimes, Domestic Public Law: ISO 14001 and Pollution Reduction

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Abstract

Debates about the efficacy of private environmental regimes have been fueled by disparate research findings, such as when the same regime that has been effective in one setting is found to be ineffective in another. In this article, we show that the efficacy of ISO 14001, the most widely adopted voluntary environmental regime in the world, is conditioned by the stringency of countries’ domestic regulations. In doing so, we outline a model of strategic corporate environmentalism wherein firms strategically focus their International Organization for Standardization (ISO) certification to reduce emissions of visible air pollutants as opposed to less visible water pollutants. Our analyses of pollution levels for a panel of 159 countries (73 for water pollution) from 1991 to 2005 indicate that ISO 14001 certifications reduce air (SO2) emissions in countries with less stringent environmental regulations but have no effect on air emissions in countries with stringent environmental regulations. We also find that ISO membership levels are not associated with reductions in water pollution levels (Biochemical Oxygen Demand BOD), irrespective of stringency of domestic law. Our article suggests that the efficacy of global private environmental regimes is likely to be conditioned by the domestic regulatory context in which firms function

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... A central question in the private-public governance debate is the extent to which private regulatory regimes are complementary to public regulation (Coslovsky & Locke, 2013, Heyes & Maxwell, 2004. In the context of ISO-14001, on the one hand, some studies suggest that stringent domestic environmental regulations are likely to substitute the utility of ISO-14001 in reducing pollution because stronger domestic regulations will reduce the benefits of adopting the standard in terms of reputational gains (Prakash & Potoski, 2014). On the other hand, there is also evidence of a complementary effect between public and private regimes in the other related contexts of labor standards in GVCs (Locke, Rissing, & Pal, 2013). ...
... A second important point is that prior research on the joint effect of private and public regulations on pollution reduction has focused primarily on the stringency of 'domestic' (or national) regulations (Heyes & Maxwell, 2004, Prakash & Potoski, 2014 and surprisingly little on 'international' trade policies, despite private standards (such as the ISO-14001) being the most popular among exporting firms in GVCs (Christmann, 2004, Christmann & Taylor, 2002. Over the past few decades, the number of trade agreements with environmental provisions has risen. ...
... They suggest that, again, the evidence about the impact of ISO-14001 on both waste management and emission reduction is mixed; however, a large number of studies report a positive impact of the standard. Prakash and Potoski (2014), for instance, found that greater adoption of ISO-14001 at the country level is associated with reduced levels of SO2 and particulate matter (PM10) emissions. However, whereas most studies have focused on the impact of ISO-14001 on visible air emissions, very few studies have investigated the impact of ISO-14001 on the reduction in water contamination, and these did not find that the ISO-14001 standard contributes significantly to this issue (Potoski & Prakash, 2013). ...
Article
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Multinational enterprises operating global value chains are being increasingly pressured to source from suppliers that adopt green private standards. Likewise, public policymakers are also pressured to reduce national pollution levels to contribute to sustainable development initiatives. In this context, while there is extensive debate on how domestic, country-specific environmental regulations interact with private standards (adopted by firms) in reducing national pollution levels, less is known about the role of international trade policies, which have recently embraced an array of sustainability issues. Our paper seeks to extend our understanding of the extent to which ISO environmental certifications affect a country’s level of emissions of greenhouse gases and air pollutants, and whether the European Union’s environmental protection (EP) standards – as mediated through trade agreements – condition this response. Prior research provides mixed evidence on the impact of the adoption of ISO-14001 on pollution reduction. Based on prior literature and using institutional theory and environmental stewardship perspectives, we expect that membership of trade agreements with EP provisions would complement the effect of ISO-14001 uptakes in reducing national pollution levels. Our arguments and results emphasize the complexity between private and public regulations on pollution reduction.
... The impact of ISO 14001 at the country level, however, has been underexplored. To our knowledge, only Potoski and Prakash (2013) and Prakash and Potoski (2014) have focused on the macrolevel impact of this certification, finding that the aggregate level of ISO 14001 adoption-the number of ISO 14001 certifications awarded in a country-is associated with a lower level of air pollution. ...
... Our theoretical model is articulated around one baseline expectation and three hypotheses. The baseline expectation refers to the expected negative relationship between the aggregate level of ISO 14001 adoption and CO 2 emissions (Potoski & Prakash, 2013;Prakash & Potoski, 2014). Our main contribution comes from three hypotheses that examine the moderating effect of country features on this relationship, and they analyze how the association between the aggregate level of ISO 14001 adoption and CO 2 emissions differs across countries in light of competition intensity competition, the extent to which firms behave ethically, and the importance that firms attach to achieving legitimacy from stakeholders. ...
... Although the previous literature has identified important factors affecting the national level of air pollution (e.g., Cole & Neumayer, 2004;Lyu et al., 2016), scholars have put less emphasis on assessing the role of ISO 14001. To our knowledge, only Potoski and Prakash (2013) and Prakash and Potoski (2014) have focused on ISO 14001 as a determinant of the national level of air pollution. They found that the higher the aggregate level of ISO 14001 adoption in a country, the lower its level of air pollution, for two reasons. ...
Article
This study explores whether the association between the aggregate level of ISO 14001 adoption in a country and the reduction of its CO2 emissions differs across national settings. We analyze potential variations in three country features: intensity of competition, inclination of firms to behave ethically, and the importance that firms attach to relationships with stakeholders. Based on a sample of 53 countries for the period 2007–2017, our results show that the connection between the aggregate level of ISO 14001 adoption and lower levels of CO2 emissions is stronger in countries where firms tend to behave ethically but is weaker in countries where there is intense competition or where firms place high emphasis on relationships with stakeholders. These findings expand our understanding about the macrolevel consequences of ISO 14001 adoption.
... The impact that globalization and increased international trade has on the natural environment and sustainability of business practices has been much debated in academic and practitioner circles (Kolk, 2016). Proponents of the view that trade enhances environmental performance appeal to a process whereby the regulatory standards and norms of highly regulated jurisdictions get transmitted to suppliers in less regulated jurisdictions (Berliner & Prakash, 2014;Christmann & Taylor, 2001;Cole, Elliott, & Shimamoto, 2006;Prakash & Potoski, 2014). This is sometimes referred to as the "California effect" (Vogel, 1997). ...
... As governance systems evolve, evidence suggests that this coercive effect may increasingly be transmitted by nongovernmental and private actors through voluntary certification programs (Berliner & Prakash, 2015;Schembera, 2018). Participating firms voluntarily adopt higher standards than legally required, but in return program membership allows them to signal credibly their enhanced standards to stakeholders, for example, socially conscious consumers in the importing countries who would otherwise not be able to observe or evaluate internal practices (Prakash & Potoski, 2014). Voluntary accreditation programs are thus powerful policy instruments that facilitate the exchange of environmental stewardship for stakeholder appreciation ( Vogel, 2005). ...
... The studies investigated use a diverse range of variables that might influence the ISO 14001 adoption decision of a firm. A breakdown of the determinants across the field reflects the influence of stakeholder theory contending that firms will respond to pressures exerted by stakeholders (Margolis & Walsh, 2003;Orlitzky, Schmidt, & Rynes, 2003;Prakash & Potoski, 2014;Schembera, 2018). These pressures can be conceived in a transactional perspective where firms make decisions on the basis of a comparison of the costs and benefits of certification or alternatively using neoinstitutional theory according to which firms tend to adapt to prevailing norms and rules in its environment (Berliner & Prakash, 2015;Hauser & Hogenacker, 2014). ...
Article
Does the export orientation of a firm affect the likelihood that it adopts an environmental management certification? We use meta-regression methods to analyze systematically the corpus of published research on export-led adoption of the largest and most prominent certification, ISO 14001. We show that the explanatory variables authors choose to include in their models reflect the tenets of stakeholder and institutional theories. We also find that the literature suffers from substantial publication bias but that, once this is accounted for appropriately, a genuine effect remains. The evidence from 20 years of published studies taken as a whole is that export does incentivize the adoption of the standard as often hypothesized by proponents of voluntary approaches and self-regulation.
... While many smaller firms in the supply chain might not seek ISO 9001 certification due to the cost of third party certification, they might adopt the necessary management practices that ISO 9001 facilities tend to adopt (Knudsen, 2013). All in all, the effects of ISO 9001 on firms' practices are probably not confined to certified firms (Borck and Coglianese, 2009;Prakash and Potoski, 2014). In our case, we expect the increased adoption of ISO 9001 as reflected in aggregate country level counts to be associated with reductions in workplace injury rates. ...
... Our results beg an important question: why are the benefits of ISO 9001 on workplace safety greater in places with weak public governance? As we suggested earlier, one school of thought suggests that firms incur lower marginal costs to improve their workplace practices when they begin from a low base (Prakash and Potoski 2014). Firms in countries with weak public governance tend to pay less attention to occupational hazards due to absence/poor enforcement of workplace regulations. ...
... While many smaller firms in the supply chain might not seek ISO 9001 certification due to the cost of third party certification, they might adopt the necessary management practices that ISO 9001 facilities tend to adopt ( Knudsen, 2013). All in all, the effects of ISO 9001 on firms' practices are probably not confined to certified firms ( Borck and Coglianese, 2009;Prakash and Potoski, 2014). In our case, we expect the increased adoption of ISO 9001 as reflected in aggregate country level counts to be associated with reductions in workplace injury rates. ...
Article
Workplace safety is an important issue in global public policy. Given the failure of many governments to enforce their workplace safety laws, might voluntary programs help in this regard? Most studies on the effectiveness of voluntary programs focus on their first-order effects reflecting program goals. Yet, well-designed programs that focus on firms’ internal practices and policies can have significant spillover effects beyond the program objectives. This insight motivates our study of the second-order effect on occupational safety of ISO 9001, the most widely adopted voluntary standard in the world. While ISO 9001 is a quality management standard, the internal systems that ISO certified firms establish can improve workplace safety. This is because some workplace practices that lead to poor product quality also contribute to an unsafe working environment. Our empirical analysis covering 92 countries for the period 1993–2012 supports our argument. We find that 1 per cent increase in country-level ISO 9001 certification count is associated with 0.04 per cent decline in occupational injury rate (injury per 10,000 working population). Importantly, our finding is more pronounced where public law regarding workers’ rights is weak, suggesting that voluntary programs can fill in the governance gaps.
... At the same time, many contributions are aimed at evaluation of ISO 14001 environmental efficacy (e. g. Yin and Schmeidler, 2009;Prakash and Potoski, 2014;Arimura et al., 2016;Baek, 2018;Zobel, 2018). For instance, Baek (2018) has not confirmed a significant difference between environmental performance of ISO 14001 certified and non-certified facilities in Korea. ...
... Nevertheless, ISO 14001-certification does not appear to be a guarantee of superior environmental performance or concrete environmental improvements. For example, Prakash and Potoski (2014) found that ISO 14001 certifications reduce air emissions (SO2) in countries with less stringent environmental regulations but have no effect on air emissions in countries with stringent environmental regulations. ...
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This paper examines the potential role of environmental standards in fighting air pollution and waste disposal problems. It also analyses factors affecting the environmentally-friendly behaviour of citizens in their daily lives, and their attitudes towards EU environmental legislation and helping non-EU countries improve their environmental standards. The paper uses panel and cross-sectional regression analysis based on available secondary data retrieved from Special Eurobarometer survey and Eurostat database. The results indicate that ISO environmental standards can be beneficial especially for reducing CO2 emissions and for recycling activities. Respondents show a mostly positive view of EU environmental protection legislation and standards enforcement. Women, managers, and those interested in political affairs are more in favour of environmental standards legislation.
... As said, we argue that policymakers try to shape the behaviour of non-state actors by adopting either amplification or persuasion strategies. This highlights the fluidity of political opportunity structures as policymakers themselves can shift and shape these structures through which non-state actors navigate on a specific policy dossier (see Green and Auld 2017;Prakash and Potoski 2014). From resource exchange theory, as developed in organisational sociology (Jacobs 1974;Levine and White 1961;Pfeffer and Salancik 1978) and adapted to study advocacy groups (Binderkrantz et al. 2014;Bouwen 2002;Hansen 1991;Salisbury 1969;Steffek 2013;Tallberg et al. 2018;Wright 1996), we learn that interactions among policymakers and advocacy groups are focussed on the transfer of resources such as political support and information. ...
... At the same time, policymakers are at the receiving end of these exchanges. This is an important addition to the (I)NGO and interest groups literature as it highlights the fluidity of political opportunity structures and shows how policymaking is set by non-state and state actors together (see Green and Auld 2017;Prakash and Potoski 2014). We believe this provides multiple avenues for future research, for instance, on how often policymakers successfully change the position of advocacy groups. ...
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Advocacy is typically conceived of as an activity where advocacy groups seek and policymakers grant influence. In this paper, we turn the classic approach to advocacy upside down and ask under what conditions policymakers seek to exert influence on the positions adopted by opposing or allied advocacy groups. Two strategies that policymakers can use in their interactions with advocacy groups are proposed: amplification and persuasion. We build on resource exchange theory and the concept of political opportunity structures to explain which strategy a policymaker uses. The analysis relies on a unique database, which draws from 297 interviews with policymakers from 107 different countries at global climate change and trade conferences. Our results demonstrate that, overall, policymakers seek out advocacy groups more when they are faced with increased levels of political pressures. Namely, elected politicians are more prone to seek out opposing societal interests than non-elected policymakers. Moreover, policymakers from democratically accountable countries, who work on salient issues, are more inclined to mobilize their advocacy group allies.
... As said, we argue that policymakers try to shape the behaviour of non-state actors by adopting either amplification or persuasion strategies. This highlights the fluidity of political opportunity structures as policymakers themselves can shift and shape these structures through which nonstate actors navigate on a specific policy dossier (see Green and Auld, 2017;Prakash and Potoski, 2014). From resource exchange theory, as developed in organisational sociology (Jacobs, 1974;Levine and White, 1961;Pfeffer and Salancik, 1978) and adapted to study advocacy groups ( Binderkrantz et al., 2014;Bouwen, 2002;Hansen, 1991;Salisbury, 1969;Steffek, 2013;Tallberg et al., 2018;Wright, 1996), we learn that interactions among policymakers and advocacy groups are focussed on the transfer of resources such as political support and information. ...
... At the same time, policymakers are at the receiving end of these exchanges. This is an important addition to the (I)NGO and interest groups literature as it highlights the fluidity of political opportunity structures and shows how policymaking is set by non-state and state actors together (see Green and Auld, 2017;Prakash and Potoski, 2014). We believe this provides multiple avenues for future research, for instance, on how often policymakers successfully change the position of advocacy groups. ...
Article
Full-text available
Advocacy is typically conceived of as an activity where advocacy groups seek and policymakers grant influence. In this paper, we turn the classic approach to advocacy upside down and ask under what conditions policymakers seek to exert influence on the positions adopted by opposing or allied advocacy groups. Two strategies that policymakers can use in their interactions with advocacy groups are proposed: amplification and persuasion. We build on resource exchange theory and the concept of political opportunity structures to explain which strategy a policymaker uses. The analysis relies on a unique database, which draws from 297 interviews with policymakers from 107 different countries at global climate change and trade conferences. Our results demonstrate that, overall, policymakers seek out advocacy groups more when they are faced with increased levels of political pressures. Namely, elected politicians are more prone to seek out opposing societal interests than non-elected policymakers. Moreover, policymakers from democratically accountable countries, who work on salient issues, are more inclined to mobilize their advocacy group allies.
... By contrast, recent work shows that certain domestic political and institutional contexts will favor participation in transnational governance and their effectiveness more than others (Andonova, Hale, and Roger 2014;Berliner and Prakash 2014;Büthe and 1 Source: http://www.theclimategroup.org/what-we-do/news-and-blogs/un-backed-online-portal-to-track-businessand-sub-national-climate-commitments/ 2 For example, restricting the scope of the paper to the Global 500 firms means that I do not have to separately control for international trade, which is presumed to be relatively "fixed" across the Global 500 firms. Mattli 2011;Hale and Roger 2014;Kollman and Prakash 2001;Koppell 2010;Prakash and Potoski 2014;Roger, Hale, and Andonova 2015). In Andonova et al. (2014), the authors find robust evidence to suggest that participation in TCG will be greatest in countries with strong civil liberties, decentralized government, competent bureaucracies, and pro-environment policies. ...
... Research on why individual actors engage in transnational governance has emphasized transnational "diffusion" processes, such as advocacy pressures and commodity chains, through which social and material pressures are transmitted (Bartley 2010;Dauvergne and Lister 2010;García-Johnson 2000;Perkins and Neumayer 2010;Prakash and Potoski 2006;Vogel 1995Vogel , 2005Vogel , 2008Vogel , 2010. More recent research shows that national levels of openness and connectedness to the rest of the international system are dependent on or endogenous to domestic politics (Berliner and Prakash 2014;Büthe and Mattli 2011;Hale and Roger 2014;Keohane and Milner 1996;Kollman and Prakash 2001;Prakash and Potoski 2014;Roger et al. 2015). In other words, certain domestic contexts will favor participation in transnational governance and their effectiveness more than others. ...
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This article focuses on the Global 500, which are the world?s largest companies by revenue, to examine the factors and dynamics internal to companies that motivate some corporations, but not others, to engage in transnational climate governance. Empirical results based on multilevel mixed-effects analyses, which separately identify the relative weight of firm and country-level factors, suggest that the likelihood that a firm participates in transnational climate governance (TCG) is higher when there exists a ?policy supporter? who champions sustainability policies and when a company adopts explicit sustainability practices, such as the incorporation of ESG (Environmental, Social and Governance) principles. Voluntary climate action and carbon disclosure are more likely to take place when a company has a large asset base and certifies with the ISO 14001 environmental management standard. Moreover, the level of civil liberties that corporations enjoy in their respective country of origin is associated with participation in TCG. A decomposition of the variance indicates that firm-level factors account for a majority of the variance in TCG participation. This study has implications for climate change governance and policies, which have increasingly focused on concrete climate solutions and innovations by nonstate and substate actors.
... In contrast, we would expect that direct instruments would have a negative effect on externally certified EMS as a number of recent studies (Berliner and Prakash, 2013;Prakash and Potoski, 2013) suggest that corporate voluntarism has evolved as a substitute for government intervention in the broader framework of neoliberal state policies. Accordingly, firms certify an in-house EMS externally in order to address the void created by the insufficiency of regulations and to signal their green credentials to stakeholders. ...
... However, recent studies argue that there may be little need to signal cleanness through formal certification under heavily regulated industrial settings where pollution levels are already closely measured, monitored, and controlled by the authorities. Berliner and Prakash (2013) and Prakash and Potoski (2013) state that EMS certification is used to generate a distinction via brand name recognition, which assures stakeholders that the firm is clean. When regulatory regimes are lax, firms tend to certify their EMS in order to differentiate themselves in the marketplace. ...
Article
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This article focuses on environmental management systems (EMS) and aims to enhance our understanding of the relationship between environmental state regulation and self-regulation. Unlike previous studies that treat state regulation as uni-dimensional and focus on externally certified forms of environmental self-regulation, this article takes a more nuanced approach. It looks at how direct and indirect state regulation and its stringency influence both non-certified in-house and externally certified adoption of EMS. Methodologically, the study differentiates from previous research by acknowledging the interconnected nature of in-house and external certification decisions, viewing these decisions as sequential. Based on a survey of 2076 UK firms, findings show that effective environmental protection entails collaboration between environmental state regulation and in-house adoption of EMS. Results also reveal that externally certified EMS substitute for state environmental regulation, filling the void that results from weakening state regulation in the context of neoliberalism.
... That literature identifies conditions shaping consumer movements, sensitivity to labeling, and willingness to steer purchases to protect social standards (Bucic et al., 2012;€ Oberseder et al., 2013). A few studies have also considered how national policy making affects CSR activity, though focused more on the environmental realm (Prakash and Potoski, 2014) or on the role of broad colonial history, statism, or policies steering private-regulatory activity (Campbell, 2007;Fransen, 2013;Steurer, 2010). Most such work ignores the interaction between governmental social protection and ethical consumerism – again betraying an assumption that private regulation has not strongly influenced, or been influenced by, public-policy regulation. ...
Article
This paper explores attitudes about alternative paths to promoting labor and social standards in the global political economy: public welfare states protecting workers and social standards through policy and regulation, versus private ‘red consumerism’ protecting standards through consumer buying-power and corporate social responsibility (CSR). Scholarly debate has emerged over whether these public and private realms reinforce or undermine one another, but has lacked empirical traction to systematically judge such relationships. This paper provides such traction by analyzing European public opinion towards welfare redistribution and towards using consumer power to protect labor and social standards. It matches public opinion data on attitudes towards such issues to measures of existing public and private social protection. The analysis of public opinion suggests that red consumerism is more popular in settings with already-generous public protection, including strong social-policy programs and labor regulation. But the tendency of trade competition and other economic risks to spur a citizen's support for welfare-state redistribution is diminished where CSR activity and ethical consumerism have stronger footholds. While ‘red’ ethical consumerism and CSR activities may be facilitated by generous existing social policies, they might well erode citizen support for those policies.
... For most studies, the emphasis in the empirical argumentation lies on differences across advanced economies. Here authors attempt to adjudicate among arguments about which kinds of public regulatory configurations spur more CSR activities: there where private regulations substitute for a lack of governmental intervention, or there where private regulations complement an abundance of governmental interventions and other socioeconomic arrangements in the economy (Gjolberg 2009b;Kinderman 2012;Prakash and Potoski 2014). Accordingly, CSR either substitutes for government involvement or 'mirrors' it ( Jackson and Apostoulakou 2010;Kinderman and Lutter 2016). ...
Article
This article explores whether private regulatory activity to promote labour and social standards might hollow out traditional public regulations to provide welfare and labour protection at home and abroad. Such exploration has hitherto been frustrated by empirical limitations of measures of private regulatory activity and its implications for public regulation. The present article extends those limits by focusing on how new measures of labour-related private regulation affect attitudes in 27 European polities towards welfare redistribution and for foreign assistance. Our analysis suggests that private-regulatory CSR promoting labour and social standards may directly and indirectly diminish public support for domestic welfare redistribution, but appears to have little effect on support for foreign aid. We see, hence, possible crowding-out only with respect to domestic, not international, assistance.
... Examining a firm's voluntary activities is important because, by definition , they are not mandated by regulations; they reflect a firm's purposeful decisions to exceed legal requirements. In doing so, these activities might meet (or even set new thresholds for) expectations of socially acceptable behaviors or address external pressures on a firm from rivals (Delmas, Hoffman, & Kuss, 2011; Greening & Turban, 2000; Prakash & Potoski, 2013). With this study, we make two significant contributions. ...
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Research has traditionally portrayed voluntary corporate responsibility (CR) actions toward employees as episodic, discretionary activities that individual firms take in response to marginalized, fringe “gadflies.” In this study, which examines numerous external pressures from a firm’s institutional and task environment, our findings suggest more than simple episodic responses that vary from firm to firm, but rather a conformity of action with respect to a firm’s voluntary activities toward its employees. In the absence of explicit mandates, firms are voluntarily strengthening employee relations, especially if they are increasing employee-relations concerns. Overall, external pressures significantly affect the CR activities that firms direct toward employees.
... The EU has clearly recognized that private and hybrid governance can contribute to achieving global development goals in the field of climate change policy. It is worth examining what kind of operational solutions, certification systems and professional fora (Auld and Cashore, 2012;Potoski and Prakash, 2013) are to be introduced and applied in order to deliver the expected results. ...
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... They suggest that non-state mechanisms can serve as "functional equivalents" of state institutions in the provision of governance services. Departing from the literature emphasizing that non-state institutions need to be understood in the context of the shadow of the state ( Berliner & Prakash, 2014;Prakash & Potoski 2014), Borzel and Risse suggest that whether institutions operate in the state's shadow or in sunshine may not have much relevance to their efficacy. They focus instead on the role of informal institutions grounded in social trust to identify the conditions effective institutions need to emerge and contribute to the provision of public goods. ...
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... Other scholars have examined how levels of regulation in a firm's home country affect CSR activity (see Tosun et al., this issue). Prakash and Potoski (2013), for example, find that corporations operating in countries with more stringent environmental legislation are more likely to join ISO 14001, a certifiable management system. ...
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This article examines the relationship between national varieties of capitalism and firm engagement with the norms and best practices promoted within the global organisational field for corporate social responsibility (CSR). Using a content analysis of the CSR reports of US and European firms, we show that firms from the coordinated market economies (CME) of Europe engage more substantively with labour and human rights than their US counterparts that operate in a liberal market economy (LME). The environmental commitments of firms in both regions, however, are more developed than practices related to these social issues. These findings support the view that CSR is more developed in CMEs than LMEs, but limit this support to social CSR issues. We posit that firms’ higher levels of engagement with environmental CSR likely reflect the extent to which environmental norms have become embedded in global markets rather than how CSR is promoted by national capitalist systems.
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The main objective of this paper is to analyze the determinants underlying the internalization of proactive environmental management proposed by certifiable environmental management systems (EMS) such as those foreseen by ISO 14001 and EMAS (the European Management and Auditing Scheme). Using a study based on 232 usable questionnaires from EMAS-registered organizations, we explored the influence of institutional pressures from different stakeholders and the role of corporate strategy in the “substantial” versus “symbolic” integration of environmental practices. The results highlighted that although institutional pressures generally strengthen the internalization of proactive environmental practices, the influence of stakeholders can either support the integration of these practices or encourage their superficial adoption. For example, while pressures from suppliers and shareholders contribute to corporate greening, pressures from customers and industrial associations tend to encourage greenwashing (i.e. the superficial and misleading adoption of environmental practices). Product quality -oriented strategies also positively influence EMS internalization. The paper sheds light on the institutional complexity underlying the substantial versus symbolic implementation of environmental practices, and questions the dominant isomorphic view of EMS adoption. The paper also bridges the gap between complementary approaches on corporate greening, notably neo-institutional and stakeholder theories. Keywords: environmental management system; environmental strategy; greenwashing; institutional complexity; stakeholders
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We explore the role of ISO 14001 certification in stimulating increased exports for certified firms. The rationale for the study is that certification conveys an important market signal that the certified firm's production process adheres to internationally accepted standards of environmental quality. That is, the perceived credibility of ISO 14001 certification lowers informational barriers about the environmental attributes of the certified firm's products, especially in foreign markets, boosting exports. We put this proposition to an empirical test using the gravity trade model and a panel of South Korean manufacturing industries exporting to 176 countries over the 1988–2015 period. Our results show that ISO 14001 certification generates a robust positive push effect for South Korean manufacturing exports. We further find that this effect varies based on the level of economic development of the destination market, with a more pronounced impact of certification on exports to high‐income countries than to middle and lower income countries.
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Depuis le début du 20èmé siècle, les nuisances affectant le milieu urbain avaient pour principale origine la conjonction d'une densité de population élevée et d'activités industrielles polluantes. La pollution que génèrent ces dernières a pris des dimensions alarmantes, et constitue le plus grand fléau que l’humanité ait à affronter dans les prochaines années, faute de quoi les possibilités de pérennité de nos écosystèmes seraient irréversiblement compromises. En Algérie, l’environnement malsain, toutes causes confondues, est principalement celui du monde urbain. Le rapport Santé/Environnement est toujours médiatisé par une interrogation sur la pollution, formule hyperonyme pour signifier la nuisance du cadre de vie. De ce fait, les principales nuisances sont causées par la pollution de l’air, des eaux, des mers et des sols. Elles prennent des formes diverses : odeurs nauséabondes, modification du climat par des aménagements ou par les activités (microclimats urbains), dégradations du patrimoine architectural par l’air pollué, altération des produits alimentaires par suite de la dégradation des cultures du fait de l’air, de l’eau ou des sols pollués, etc. Pour saisir la complexité de cette situation, nous proposons, à travers cette communication, le répertoire des pollutions dans l’agglomération de Annaba quant aux incidences de ce fléau sur la population et l’environnement, appuyées par des recommandations pratiques pour les atténuer dans le cadre du développement durable.
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Over the past four decades, stakeholder research has united a chorus of voices from different disciplines using different terminology for different audiences all related to a seemingly similar topic: those that affect and are affected by business. By juxtaposing a comprehensive review of the early years of stakeholder research against more recent stakeholder research, we identify areas of common convergence (a focus on relationships and Freeman's definition of a stakeholder) as well as emergent scholarship (mechanisms underlying stakeholder relationships and solutions-oriented impacts). We develop an organizing framework consisting of three stakeholder-related themes: who or what is a stakeholder; mechanisms underlying stakeholder relationships; and outcomes-oriented stakeholder research. Future research opportunities include: simultaneously examining multiple stakeholders at multiple levels; multiplier effects along the value chain and across geographies; and net impacts (examining whether net positive benefits inclusive of negative outcomes exist). We conclude by identifying how stakeholder research can “move the needle” on important business issues such as: income inequality and CEO pay; human rights and building community inclusion; disease alleviation; and food security in firms’ continuous quest to create value.
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While many scholars have studied “urban bias” in public policy, the potential for bias in the private provision of public goods has received little attention. Private certification is a mechanism encouraging private provision of environmental public goods. We show that within countries, there are often wide disparities in certification rates between firms located in urban and non-urban areas. However, these disparities can be mitigated if there is a countervailing force: scrutiny of firms' practices by key stakeholders. We suggest that the presence of strong civil society, independent media, a functioning state regulatory apparatus, and multinational owners can ameliorate the urban bias in certification uptakes. We test this argument with global, firm-level data covering over 40,000 firms in ninety-three countries. Our analyses suggest that an urban bias is mitigated when stakeholders—both public and private—have the freedom and capacity to scrutinize firms' activities.
Article
Given the recognition of the seriousness of climate change and other forms of environmental challenges, a growing number of political scientists are working in the environmental area. We have a substantial body of research examining local, regional, and global environmental issues. It is our sense that time is ripe for the field of international and comparative environmental politics to reflect on existing work, integrate it, and clearly articulate directions for future research. This special issue seeks to encourage scholars to systemically examine the roles of domestic and international factors, either alone or in interaction, to develop more nuanced models of environmental politics across space and time. We hope that the papers here will help to define the research frontier for the environmental politics field. Collectively, they exemplify recent efforts in comparative and international environmental politics that are, first, explanatory in orientation; second, cross levels of analysis in a way that transcends artificial subdisciplinary distinctions; and finally, are based on application of a variety of research methods and modeling techniques standard among the wider political science community.
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Multiplicative interaction models are common in the quantitative political science literature. This is so for good reason. Institutional arguments frequently imply that the relationship between political inputs and outcomes varies depending on the institutional context. Models of strategic interaction typically produce conditional hypotheses as well. Although conditional hypotheses are ubiquitous in political science and multiplicative interaction models have been found to capture their intuition quite well, a survey of the top three political science journals from 1998 to 2002 suggests that the execution of these models is often flawed and inferential errors are common. We believe that considerable progress in our understanding of the political world can occur if scholars follow the simple checklist of dos and don'ts for using multiplicative interaction models presented in this article. Only 10% of the articles in our survey followed the checklist.
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We compare the environmental performance of voluntary environmental programs (VEPs) with different attributes. Using club theory, we argue that the differential performance of VEPs is due in part to their specific design attributes that will either enhance or diminish their ability to improve both targeted and untargeted environmental impacts. We analyze two VEPs in Mexico, the global standard ISO 14001 and the local standard Clean Industry. These two VEPs differ in the stringency of the standards and in their ability to sanction noncompliant facilities. These differences ensure that firms adopting the local standard are less likely to shirk their responsibilities and enhance potential spillover effects on untargeted environmental emissions. Our empirical results support our hypotheses and show that the local Clean Industry program is more effective in improving both targeted (toxic emissions) and untargeted environmental impacts (greenhouse gas emissions).
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This article tests the hypothesis that democracies exhibit stronger international environmental commitment than non-democracies, using multivariate econometric techniques. A number of proxy variables are used in lieu of environmental commitment, a non-observable variable. Strong evidence is found that democracies sign and ratify more multilateral environmental agreements, participate in more environmental intergovernmental organizations, comply better with reporting requirements under the Convention on International Trade in Endangered Species of Fauna and Flora, put a greater percentage of their land area under protections status, are more likely to have a National Council on Sustainable Development in their country and have more environmentally relevant information available than non-democracies. The findings suggest that a spread of democracy around the world will lead to enhanced environmental commitment worldwide. Results are robust with respect to inclusion or exclusion of developed countries in the sample. The use of four different variables for democracy also ensures robustness with respect to the measure of democracy. The strong evidence in favour of a positive link between democracy and environmental commitment stands in contrast to the somewhat weak evidence on such a link between democracy and environmental outcomes. The explanation presumably is that theory predicts a stronger positive link of democracy with environmental commitment than with environmental outcomes.
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nal, and world levels —across the nations, paying attention to possible differences between industrialized and non-industrialized nations. It will then focus on several issues related to the linkage between environment and development: the relative responsibility of rich and poor nations for the world's environmental problems; the major contributor to environmental problems within the poorer, developing nations; and the actions that the industrialized nations should take in order to help developing nations protect their environments. Comparing responses to these items will provide insight into public attitudes toward sustainable development and how it might best be achieved. Finally, responses to two items dealing with support for an international environmental agency will shed light on public endorsement of enhanced international enforcement of environmental protection, and how it varies across nations.
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Standards have become one of the most important nontariff barriers to trade, especially national product standards that specify design or performance characteristics of manufactured goods. Divergent national standards often inhibit trade, whereas regional and international standards increasingly serve as instruments of trade liberalization. Consequently, the setting of international standards—seemingly technical and apolitical—is rapidly becoming an issue of economic and political salience. But who sets international standards? Who wins, who loses? This article offers a fresh analytical approach to the study of international standards, which the authors call the institutional complementarities approach. It builds on insights from realism and the “Battle of the Sexes” coordination game but emphasizes complementarities of historically conditioned standardization systems at the national level with the institutional structure of standardization at the international level. It posits that, after controlling for other factors that influence involvement in international standardization, differences in institutional complementarities play a critical though largely accidental role in placing firms from different countries or regions in a first- or second-mover position when standardization becomes global. The authors illustrate the insightfulness of this approach through statistical analyses of the first scientific set of data on standards use and standardization, collected by the authors through an international online survey.
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The effect of left-wing party strength and corporatism on air pollution levels in up to 21 OECD countries over the period 1980 or 1990-1999 is tested with both fixed-effects and random-effects estimators. Controlling for scale, composition, technique as well as aggregate time effects, robust evidence is found that parliamentary green/left-libertarian party strength is associated with lower pollution levels. The rise of ecologically oriented parties has thus had a real impact on air pollution levels. Traditional left-wing party strength is possibly also associated with lower pollution levels, but the evidence is less consistent and robust. Combined left-wing party strength in government is possibly associated with higher pollution levels, but this result is also far from robust and is practically small. No evidence is found for a consistent systematic impact of corporatism on pollution levels.
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Voluntary environmental programs (VEPs) have been used as a policy tool in the United States since the early 1990s and come in many forms. Early assessments of VEPs targeting changes in production processes showed that industrial participants improved their environmental performance and VEPs were celebrated as a viable alternative to more traditional regulation. Recent analyses using more sophisticated techniques, however, paint a less favorable picture. On the one hand, firms appear willing to sign up to VEPs, and in some cases, participants may be able to create a shield against future losses in shareholder value. On the other hand, these VEPs targeting production processes appear not to generate significant pollution abatement. The latter finding is particularly disturbing and this article discusses various explanations, including institutional failure and participant motivations. Future research needs to focus on understanding the firm motivation to invest in production-related pollution abatement under a VEP. For policymakers, the research offers a warning on the limited impact to date of VEPs targeting production processes. However, the multitude of other VEPs, such as those which target new product development and changing market demands, merit a closer look to determine the overall potential of VEPs to engender positive environmental change.
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This research explores why some facilities accrue greater costs when adopting an environmental management system (EMS) and why costs vary among three different ownership structures. Using survey data of organizations that documented their EMS adoption costs over a 3-year period, the results show that publicly traded facilities had stronger complementary capabilities prior to EMS adoption and therefore lower adoption costs. By contrast, government facilities and privately owned enterprises had fewer capabilities and accrued higher EMS adoption costs. The development of organizational capabilities and resources therefore appears to be a function of both organizational exploitation of imperfect or incomplete market factors, and the institutional context of these decisions. Copyright © 2006 John Wiley & Sons, Ltd.
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Using Japanese facility-level data, we estimate the effects of ISO 14001 certification on the promotion of more advanced practices, namely green supply chain management (GSCM). Our results show that ISO 14001 promotes GSCM practices. Facilities with environmental management systems (EMS) certified to ISO 14001 are 40% more likely to assess their suppliers' environmental performance and 50% more likely to require that their suppliers undertake specific environmental practices. Further, government programs that encourage voluntary EMS adoption indirectly promote GSCM practices. These programs increase the probabilities that facilities will assess their suppliers' environmental performance and require suppliers to undertake specific environmental practices by 7% and 8%, respectively. Combined, these findings suggest that there may be significant but previously unnoticed spillover effects of ISO 14001 and government promotion of voluntary action.
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Full-text available
The effect of left-wing party strength and corporatism on air pollution levels in up to 21 OECD countries over the period 1980 or 1990–1999 is tested with both fixed-effects and random-effects estimators. Controlling for scale, composition, technique as well as aggregate time effects, robust evidence is found that parliamentary green/left-libertarian party strength is associated with lower pollution levels. The rise of ecologically oriented parties has thus had a real impact on air pollution levels. Traditional left-wing party strength is possibly also associated with lower pollution levels, but the evidence is less consistent and robust. Combined left-wing party strength in government is possibly associated with higher pollution levels, but this result is also far from robust and is practically small. No evidence is found for a consistent systematic impact of corporatism on pollution levels.
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Full-text available
The ‘California effect’ hypothesis posits that economic integration may lead to the ratcheting upwards of regulatory standards towards levels found in higher-regulating jurisdictions. Although a number of previous large sample quantitative studies have investigated such convergence dynamics for public environmental policies, their results have been based exclusively on geographically and sectorally aggregated data. Our contribution advances on these studies. We provide the first large-N, geographically disaggregated evidence consistent with a trading-up effect: exports of automobiles and related components from developing countries to countries with (more stringent) auto emission standards are found to be associated with (more stringent) domestic emission standards. Investing-up dynamics are also apparent, with aggregate inward FDI into host developing economies’ automotive sector increasing the likelihood of more stringent emission standards domestically.
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We extend the economic theory of regulation to allow for strategic self-regulation that preempts political action. When political "entry" is costly for consumers, firms can deter it through voluntary restraints. Unlike standard entry models, deterrence is achieved by overinvesting to raise the rival's welfare in the event of entry. Empirical evidence on releases of toxic chemicals shows that an increased threat of regulation (as proxied by increased membership in conservation groups) indeed induces firms to reduce toxic releases. We establish conditions under which self-regulation, if it occurs, is a Pareto improvement once costs of influencing policy are included. Copyright 2000 by the University of Chicago.
Article
The difference and system generalized method-of-moments estimators, developed by Holtz-Eakin, Newey, and Rosen (1988, Econometrica 56: 1371–1395); Arellano and Bond (1991, Review of Economic Studies 58: 277–297); Arellano and Bover (1995, Journal of Econometrics 68: 29–51); and Blundell and Bond (1998, Journal of Econometrics 87: 115–143), are increasingly popular. Both are general estimators designed for situations with “small T, large N″ panels, meaning few time periods and many individuals; independent variables that are not strictly exogenous, meaning they are correlated with past and possibly current realizations of the error; fixed effects; and heteroskedasticity and autocorrelation within individuals. This pedagogic article first introduces linear generalized method of moments. Then it describes how limited time span and potential for fixed effects and endogenous regressors drive the design of the estimators of interest, offering Stata-based examples along the way. Next it describes how to apply these estimators with xtabond2. It also explains how to perform the Arellano–Bond test for autocorrelation in a panel after other Stata commands, using abar. The article concludes with some tips for proper use.
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Using Japanese facility-level data from an OECD survey, we estimate the effects of implementation of ISO14001 and publication of environmental reports on the facilities' environmental performance. While most previous studies focused on an index of emissions toxicity, this study examines three areas of impacts, none of which have been explored in the literature: natural resource use, solid waste generation, and wastewater effluent. The study is also unique in that the effectiveness of ISO14001 is considered in relation to environmental regulations. Our findings are summarized as follows. First, both ISO14001 and report publication help reduce all three impacts; the former appears more effective in all areas except wastewater. Second, environmental regulations do not weaken the effect of ISO14001. Third, assistance programs offered by local governments--a voluntary approach--promote facilities' adoption of ISO14001. These findings suggest that governments can use command-and-control and voluntary approaches concurrently.
Book
The Co-operation on Environment and Development provides an annual assessment of international environmental collaboration, the main obstacles to effective international solutions, and how to overcome them. As in previous years, this edition identifies the main agreements and discusses their scope, time of establishment, status of participation and overall effectiveness. This edition includes extensive revisions of entries covering: the new Kyoto Protocol on climate change; Inter-governmental Organisations (IGOs) (including UN specialised agencies); International Non-governmental Organisations (NGOs); summaries of the performance and main commitments of 14 OECD countries in addition to Argentina, China, India, Malaysia, and the Russian Federation. This year the editors have also commissioned a series of cutting edge review chapters on the Rio process, the Forest Stewardship Council (FSC), the International Whaling Commission, the London Convention on Dumping of Waste at sea, and the UN Commission for Sustainable Development. The unique combination of independent, high-quality analysis and up to date reference material makes this Yearbook a useful for decision-makers and academics alike.
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How do domestic political institutions, specifically veto players, mediate the effect of trade competition on regulatory races in the environmental area? Is the mediating effect more pronounced for more visible pollution issues such as air pollution in relation to less visible water pollution? Governments are expected to respond to trade pressures by lowering regulatory costs. To do so, governments can rewrite regulations (de jure policy change) and/or lower the enforcement of existing regulations (de facto policy change). In contrast with de facto changes, de jure policy changes are more likely to invite opposition from pro-environment constituencies, and are therefore politically more difficult. Our analysis of 140 countries for the period 1980–2003 suggests that in response to trade pressures, governments do not lower regulatory stringency by rewriting (de jure) environmental regulations for any level of domestic constraints. In contrast, when political constraints are low, governments respond to trade pressures by adjusting regulatory stringency via de facto changes. Moreover, in the context of de facto policy changes, the constraining effect of veto players is more pronounced for air pollution (sulphur dioxide) in comparison to water pollution (biochemical oxygen demand). This is because air pollution is a more visible pollution issue around which organized, urban constituencies tend to mobilize.
Article
This article introduces a large new cross-country database, the Database of Political Institutions. It covers 177 countries over 21 years, 1975-95. The article presents the intuition, construction, and definitions of the different variables. Among the novel variables introduced are several measures of checks and balances, tenure and stability, identification of party affiliation with government or opposition, and fragmentation of opposition and government parties in the legislature.
Article
Environmental management systems (EMSs) are intended to formalize procedures for managing and reducing environmental impacts. Construction firms typically do not have comprehensive and certified environmental management systems. This paper discusses the elements of environmental management systems, the relationship to the ISO 14001 standard, and the importance for construction firms to implement an EMS. A case study of a certified environmental management system for a construction firm is presented. Benefits and costs of such systems are identified. The paper concludes that construction firms should begin to work towards implementing more complete environmental management systems, although fully certified systems are not essential.
Article
Construction firms all over the world are increasingly seeking to obtain ISO 14001. The rapid growth in the number of ISO 14001 applications in Turkey and the share from the construction sector in this number, as a leading sector, is rather striking. This paper, using a structured questionnaire survey, investigates whether there is any dependence or relation between construction firms characteristics and having ISO 14001 certification and any difference in the perceptions related to ISO 14001 by considering both firm characteristics and two different groups as certified and non-certified firms. Additionally, it examines the perceived benefits of having ISO 14001 for certified construction firms. According to the results of analysis, although there is not any difference in perceptions on ISO 14001 certification in terms of firm characteristics and being as certified and non-certified and their both positive opinions about ISO 14001 certification. There is a relation between firms characteristics and having ISO 14001 certification. ISO 14001 certification contributes to construction firms not only in terms of environmental benefits but also with corporate management and marketing effects, thus verifying that the ISO 14001 has a positive impact on the Turkish construction sector.
Article
Increasing attention to environmental management has raised many new dilemmas for firms. How can managers deal with environmental issues in a competitive situation that is international and heterogeneous? What are the strategic and financial implications of environmental management? How can they cope with regulation, considering the choices which range from compliance to voluntary initiatives? And how do other firms organise their environmental management and communicate with stakeholders? This book examines these different topics, without dogma or prescription. It demonstrates the complexity of an area in which there are often no right or easy answers. The Economics of Environmental Management: 7 shows the links between the main functional areas of a business and environmental management; 7 examines regulation and self-regulation in different countries and worldwide; 7 pays specific attention to multinational enterprises; 7 gives an international state of the art on environmental management systems and standards (especially ISO 14001 and EMAS); on environmental reporting and verification; and on environmental management accounting; 7 contains international case examples and a wealth of annotated references to paper and electronic sources.
Article
Small and medium-sized enterprises (SMEs) make up the vast majority of businesses in Europe. These enterprises are vitally important for a healthy dynamic market economy. However, the environmental impact of small firms is not known either at national or regional levels. Voluntary self-regulatory initiatives such as the eco-management and audit scheme (EMAS) and the international environmental management system (EMS) standard ISO 14001 seek to provide all businesses with the means to develop systematic approaches to improve environmental performance. All purport to be relevant and applicable to small and medium-sized firms; however, their uptake by SMEs has been patchy at best and down right miserable at worst. This paper sheds some light on the barriers, opportunities and drivers for EMS adoption by the SME sector. Drawing on original research investigating EMAS implementation across the European Union and a major detailed review of 33 studies which explore the sector’s use of EMS, this paper estimates the number of SMEs registered to EMAS and ISO 14001 and identifies a range of issues which influence the adoption of formalised EMS. Despite these problems, the paper suggests SMEs do find real benefits from adopting EMS.
Article
To meet the urgent need of atmospheric chemistry and climate modellers a global emissions source database called EDGAR has been developed jointly by TNO and RIVM to estimate for 1990, on a regional and on a grid basis, annual emissions of greenhouse gases (CO2, CH4, N2O, CO, NOx, non-methane VOC, SOx), of NH3, and of ozone depleting compounds (halocarbons). The aim was to establish the global emissions from both anthropogenic and biogenic sources: a complete set of data required to estimate the total source strength of the various gases with an 1o×1o resolution (altitude resolution of 1 km), as agreed upon in the Global Emissions Inventory Activity (GEIA) of the International Atmospheric Chemistry Programme (IGAC). The data comprise demographic data, social and economic factors, land use distributions and emission factors (with due emphasis on the uncertainty). As understanding in this field is still changing, due attention is paid to flexibility regarding the disaggregation of sources, spatial and temporal resolution and species. The objective and methodology chosen for the construction of the database are presented, as well as the type and sources of data and the approach used for data collection. As an example, the construction of the N2O inventory is discussed.
Article
Voluntary environmental programs (VEPs) seek to improve the environment by encouraging, rather than mandating, businesses and other organizations to adopt environmentally protective measures. Since the 1990s, VEPs established by industry, government, and nongovernmental organizations have proliferated around the globe, raising the question of how effective these programs are in securing environmental protection, both on their own and in comparison to traditional mandatory regulations. This article reviews the emerging research literature on VEPs, describing the variation in their structures, providing a framework for assessing their impacts, and summarizing what is known about why organizations engage in voluntary environmental action and what effects these programs have on environmental quality.
Article
Conceptually, the five key elements in ISO 14001—policy, planning, implementation and operation, checking and corrective action, and management review—were designed to be simple enough for any business owner or manager to understand. Environmental Management Systems, aligned to ISO 14000, were originally set up toprovide a harmonized approach for organizations regardless of size, sector, or geographical situation. This article details the many challenges SMEs must confront in implementing the new standards.
Article
This research examines the potential of information disclosure for environmental regulation. The research attempts to answer questions of what impact information disclosure has on corporate environmental practices and what interferes with its effective use. A case study of Indonesia's pioneering informational environmental regulation reveals (i) both indirect (e.g. anticipation of external pressure) and direct (e.g. internal learning support) informational effects that enhance environmental awareness at the top management level and stimulate changes in production processes and (ii) detrimental effects of disclosed information that maintain or strengthen the extant power of regulated firms over environmental groups and local communities affected. Regulatory efforts can be leveraged by public disclosure of information regarding firms' environmental performance, especially where the state monitoring and enforcement capacities are weak. However, the introduction of policies of this kind without consideration of different market conditions and political and administrative culture may impede the effectiveness of this potentially useful regulatory method.
Article
Voluntary environmental programs (VEPs) are institutions for inducing firms to produce environmental goods beyond legal requirements. A comparative perspective on VEPs shows how incentives to sponsor and participate in VEPs vary across countries in ways that reveal their potential and limitations. Our brief survey examines conditions under which VEPs emerge, attract participants, and improve participants' environmental performance. We focus on the costs and bene-fits for actors seeking to supply (or sponsor) these governance mechanisms as well as the costs and benefits for firms who are considering joining VEPs and adhering to their program obligations. © 2011 by the Association for Public Policy Analysis and Management.
Article
More than 60000 organizations worldwide have implemented environmental management systems (EMSs). About 800 of them are located in Austria. As Austria was one of the leading countries in promoting the EU scheme EMAS, and as there has been no specific study on Austrian experiences with ISO 14001, the purpose of this study is to describe the experiences with and effects of ISO 14001 in Austria. The results show that ISO 14001 often leads to reduced environmental impact, especially in the area of waste. A strong driving force behind implementation is the expected improvement of an organization's image. The average repayment time on an investment in an EMS is less than two years. Legal compliance tends to be difficult to implement, but on the other hand it works well in daily practice. To develop an EMS into a sustainability management system, the two most important challenges are to improve coordination between the EMS and the organization's strategies and to synchronize the EMS with central value chains. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.
Article
In this article we explore how much state is necessary to make governance work. We begin by clarifying concepts of governance and the “shadow of hierarchy” and we follow this clarification with a brief overview of empirical findings on governance research in developed countries. We then discuss the dilemmas for governance in areas of limited statehood, where political institutions are too weak to hierarchically adopt and enforce collectively binding rules. While prospects for effective policymaking appear to be rather bleak in these areas, we argue that governance research has consistently overlooked the existence of functional equivalents to the shadow of hierarchy. We assert that governance with(out) government can work even in the absence of a strong shadow of hierarchy, we identify functional equivalents to the shadow of hierarchy, and we discuss to what extent they can help overcome issues of legitimacy and effectiveness in areas of limited statehood.
Book
Can businesses voluntarily adopt progressive environmental policies? Most environmental regulations are based on the assumption that the pursuit of profit leads firms to pollute the environment, and therefore governments must impose mandatory regulations. However, new instruments such as voluntary programs are increasingly important. Drawing on the economic theory of club goods, this book offers a theoretical account of voluntary environmental programs by identifying the institutional features that influence conditions under which programs can be effective. By linking program efficacy to club design, it focuses attention on collective action challenges faced by green clubs. Several analytic techniques are used to investigate the adoption and efficacy of ISO 14001, the most widely recognized voluntary environmental program in the world. These analyses show that, while the value of ISO 14001's brand reputation varies across policy and economic contexts, on average ISO 14001 members pollute less and comply better with governmental regulations.
Book
Over the last two decades environmental issues have become important in public and business policy. This book asks why firms sometimes voluntarily adopt environmental policies which go beyond legal requirements. It employs a new-institutionalist perspective, and argues that existing explanations, especially from neoclassical economics, concentrate on external factors at the expense of internal dynamics. Prakash argues that ‘beyond-compliance’ policies are due to two types of intra-firm processes, which he describes as power- and leadership-based. His argument is supported by analysis of ten cases within two firms - Baxter International Inc. and Eli Lilly and Company - including interviews with managers, and access to meetings and documents. This book therefore examines the internal working of firms’ environmental policy in a theoretically rigorous way, providing a significant contribution to the theory of the firm. It will be valuable for students of business and environmental studies, as well as political economy and public policy.
Article
The difference and system generalized method-of-moments estimators, developed by Holtz-Eakin, Newey, and Rosen (1988, Econometrica 56: 1371-1395); Arellano and Bond (1991, Review of Economic Studies 58: 277-297); Arellano and Bover (1995, Journal of Econometrics 68: 29-51); and Blundell and Bond (1998, Journal of Econometrics 87: 115-143), are increasingly popular. Both are general estimators designed for situations with "small T , large N" panels, meaning few time periods and many individuals; independent variables that are not strictly exogenous, meaning they are correlated with past and possibly current realizations of the error; fixed effects; and heteroskedasticity and autocorrelation within individuals. This pedagogic article first introduces linear generalized method of moments. Then it describes how limited time span and potential for fixed effects and endogenous regressors drive the design of the estimators of interest, offering Stata-based examples along the way. Next it describes how to apply these estimators with xtabond2. It also explains how to perform the Arellano-Bond test for autocorrelation in a panel after other Stata commands, using abar. The article concludes with some tips for proper use. Copyright 2009 by StataCorp LP.
Article
Voluntary environmental programs are codes of progressive environmental conduct that firms pledge to adopt. This paper investigates whether ISO 14001, a voluntary program with a weak sword-a weak monitoring and sanctioning mechanism-can mitigate shirking and improve participants' environmental performance. Sponsored by the International Organization for Standardization (ISO), ISO 14001 is the most widely adopted voluntary environmental program in the world. Our analysis of over 3,000 facilities regulated as major sources under the U.S. Clean Air Act suggests that ISO 14001-certified facilities reduce their pollution emissions more than non-certified facilities. This result persists even after controlling for facilities' emission and regulatory compliance histories as well as addressing potential endogeneity issues between facilities' environmental performance and their decisions to join ISO 14001. © 2005 by the Association for Public Policy Analysis and Management
Article
The increasing reliance of environmental policy on market-based incentives has led firms to shift from regulation-driven management approaches to proactive strategies involving the voluntary adoption of environmental management systems (EMSs). Count data and quantile regression analyses reveal that liability threats and pressures from consumers, investors and the public are motivating EMS adoption and that consumer pressures are particularly effective in increasing the comprehensiveness of EMSs of firms that would otherwise be adopting a limited EMS. We also find that a more comprehensive EMS leads to lower toxic emissions per unit output particularly for firms with higher pollution intensity in the past. EMSs result in reductions in both off-site transfers and on-site releases per unit output. Finally, we find that regulatory and market-based pressures do not have a direct impact on toxic releases but an indirect effect by encouraging institutional changes in the management of environmental concerns.
Article
Monte Carlo studies have shown that estimated asymptotic standard errors of the efficient two-step generalized method of moments (GMM) estimator can be severely downward biased in small samples. The weight matrix used in the calculation of the efficient two-step GMM estimator is based on initial consistent parameter estimates. In this paper it is shown that the extra variation due to the presence of these estimated parameters in the weight matrix accounts for much of the difference between the finite sample and the usual asymptotic variance of the two-step GMM estimator, when the moment conditions used are linear in the parameters. This difference can be estimated, resulting in a finite sample corrected estimate of the variance. In a Monte Carlo study of a panel data model it is shown that the corrected variance estimate approximates the finite sample variance well, leading to more accurate inference.
Article
This paper presents specification tests that are applicable after estimating a dynamic model from panel data by the generalized method of moments (GMM), and studies the practical performance of these procedures using both generated and real data. Our GMM estimator optimally exploits all the linear moment restrictions that follow from the assumption of no serial correlation in the errors, in an equation which contains individual effects, lagged dependent variables and no strictly exogenous variables. We propose a test of serial correlation based on the GMM residuals and compare this with Sargan tests of over-identifying restrictions and Hausman specification tests.
Article
Spatial, cultural, and linguistic barriers create information asymmetries between buyers and sellers that impede international trade. The International Organization for Standardization's ISO 9000 program is designed to reduce these information asymmetries by providing assurance about the product quality of firms that receive its certification. Based on analyses of a panel of 140 countries from 1994 to 2004, we find that ISO 9000 certification levels are associated with increases in countries' bilateral exports, particularly for developing countries' exports, which may be due to their more severe quality assurance challenges. © 2009 by the Association for Public Policy Analysis and Management.
Article
This article reflects on the key findings and insights offered by recent work on public understandings of air pollution, which has begun to adopt some of the concepts and methodologies associated with social constructionism. We begin with a brief discussion of debates in the social sciences generally, and human geography specifically, regarding the precepts of ‘social constructionism', before setting out the ‘heterogeneous’ mode that we adopt in this paper. In this light, we trace briefly the fairly narrow empirical, methodological and conceptual preoccupations of early air pollution perception work. These accounts usefully situate the remainder of the paper, which focuses on the recent body of research that explores public understandings of air pollution, with quite different approaches to theory and data collection to that which has gone before. The argument we develop asserts that a constructionist interpretation, in revealing ‘complexity’ and the entangled interaction of society-environment-technology, raises serious questions about the dominant political discourse of air pollution and the policy responses which it legitimates. The issues raised by this review, we believe, offer a fresh perspective and the potential to progress not only our understanding and management of air pollution risks but also the contribution of geographers to a challenging research terrain.
Article
this paper and John Ham, David Hendry and members of the econometrics group at the London School of Economics for their useful comments on an earlier draft