Voluntary agreements in environmental policy

Voluntary action can be considered as a result of 'soft' regulation, i.e. as a result of an explicit or implicit threat to impose 'command and control' regulation or market based instruments if voluntary environmental action does not follow. Voluntary action can be confirmed by a formal agreement between the industry and the authorities. It is striking however, that studies on agreements for voluntary action is almost non-existent in the theoretical literature despite the fact that such agreements actually are implemented in several European countries - and interest in this type of regulation is increasing. Voluntary agreements (VA) may thus be an interesting measure intended to reach environmental goals without effecting competitiveness too severely. In this paper, I will first try to define what is meant by voluntary agreements, and then discuss reasons why it may be considered a competitive alternative to other instruments from both the authorities' and companies' point of view.