The name is absent

Kathleen Segerson

identify three alternative approaches.⁹ First, firms could make unilateral
commitments to reduce environmental contamination. Under this
approach, the initiative is taken by the firms or the industry as a whole.
The government does not play an active role in determining the industry
response. In the context of food safety, this would be comparable to firms
voluntarily deciding to implement a HACCP system in response to market
or public pressure, without any explicit prompting by the government.
Similarly, firms could voluntarily change their product or production
processes (e.g., switch to organic farming) in an effort to provide greater
food safety to consumers. Producers who undertake voluntary changes
might then develop a system of voluntary private certification.¹⁰

Under the second approach, environmental agreements are formally
negotiated (one-on-one) between industry and public authorities. In such
cases, the firm or industry agrees to undertake some environmental
protection "voluntarily", usually in exchange for some concession granted
by the government. This concession could take the form of a guarantee
that the government would not impose mandatory standards on the firm.¹¹
Thus, the firm is essentially induced to participate through the threat of
imposition of mandatory controls if a voluntary agreement is not reached (a
"stick" approach). Alternatively, the firm could be induced to participate
through positive inducements such as subsidies designed to help offset
some of the costs associated with undertaking the protective actions (a
"carrot" approach). In the context of food safety, the firm or industry
might voluntarily agree to implementation of a HACCP approach in
exchange for a forestalling of mandatory HACCP systems that would allow
the firm less flexibility, or in exchange for some form of subsidy (e.g., tax
breaks).

Finally, the public authority could develop a voluntary scheme and then
seek participation by individual firms. For example, the U.S. Department
of Agriculture has historically used voluntary programs such as the
Conservation Reserve Program (CRP) and more recently the
Environmental Quality Incentives Program (EQIP) to induce farmers to
withdraw environmentally damaging land from production.¹² These
programs offer farmers payments in exchange for voluntary land
retirements. Similar approaches could be used to induce farmers to switch

⁹ See also Baggott (1986) and Goodin (1986).

¹⁰ A program of this type is the ISO 9000 series. See Hooker and Caswell
(1997).

¹¹ This seems to be the inducement behind the U.S. Environmental Protection
Agency's 33/50 Program and Project XL. See Davies et al. (1996) for an evaluation
of the success of these and other EPA voluntary programs.

¹² For other examples in the context of agriculture (where subsidies have been
common), see Babcock et al. (1996), Cooper and Keim (1996), Norton et al.
(1994), Wu and Babcock (1996a), and Wu and Babcock (1995). For an analysis of
farmer incentives to participate in such programs, see Segerson (1997a, 1997b).

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