Free riders and environmental voluntary approaches Online publication date: Fri, 02-Feb-2007
by James A. Cunningham
Progress in Industrial Ecology, An International Journal (PIE), Vol. 3, No. 5, 2006
Abstract: Voluntary Approaches (VAs) are commitments from industrial sectors and firms to improve environmental performance. At the heart of voluntary approaches is the degree of 'voluntariness' and therefore a high degree of consensus and cooperation among all parties to a voluntary approach is required. However, some firms refuse to 'volunteer' to participate in a VA and as such are termed as free riders. In a VA context free riding among firms can undermine the credibility of a VA, prevent targets from being achieved and ultimately can cause VAs to collapse. This paper using empirical evidence from the Irish packaging voluntary agreements examines free riders experiences. The findings illustrates in the absence of credible threats and real positive incentives that companies will free ride and they do undermine VA credibility. The paper concludes with key lessons and by arguing that consumer participation is critical to minimising free rider effects on VAs.
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